Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Minister for clarifying the matter. I do not have any difficulty with the loan-to-income ratios. It is a better measure of the affordability of a mortgage because it measures someone's capacity to service a mortgage on a monthly basis. The Central Bank has got that one right.

On the issue of the 15% wriggle room the banks have, what they have told me privately is that they will use it to look after their own customers. For a new mortgage customer or someone seeking to switch a mortgage, that wriggle room is unlikely to be available. The Central Bank has gone a long way towardsd addressing the concerns of first-time buyers. However, there will still be problems, particularly in Dublin where there is no property available for a first-time buyer for €220,000. There will be problems in other urban centres such as Cork, too.

The biggest issue thrown up by the new rules is for non-first-time buyers. For example, a home owner who wants to trade up or move home will require a deposit of €70,000 for a new mortgage on a property worth €350,000. If he or she has little or no equity in his or her existing property, I am sure the Minister will agree that is a tall order. These rules are very onerous for non-first-time buyers and they will ultimately have an impact on first-time buyers, too. If people are not in a position to trade up, the properties that should be available for first-time buyers may not come on the market. Does the Minister support the Central Bank’s rules in their entirety?

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