Jack Wall (Kildare South, Labour)
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Question 235: To ask the Minister for Finance his view on correspondence (details supplied) and on whether the position adopted in this case will adversely affect first-time buyers; his plans to assist first-time buyers in such instances; and if he will make a statement on the matter. [4659/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government believes that it is important to ensure that in so far as possible mortgages are available to people who want to buy houses. In the context of discussions on recapitalisation before Christmas Allied Irish Bank and Bank of Ireland committed to, amongst other things, providing an additional 30% capacity for lending to first time buyers in 2009. The banks also committed to actively promote mortgage lending at competitive rates with increased transparency on the criteria to be met.

A new code of conduct for Mortgage Arrears, based in the Irish Banking Federation Code of Practice on Mortgage Arrears, is under discussion and will shortly be introduced by the Financial Regulator. The new Code is expected to apply to mortgage lending activities to consumers in respect of their principal private residence in the State and to be mandatory for all mortgage lenders registered with the Financial Regulator.

The Government increased the rate of mortgage interest relief for first time buyers in Budget 2009 from 20% to 25% in year 1 & 2 of their mortgage and to 22.5% in year 3 and 5. It will remain at 20% in year 6 and 7. This measure follows on from the significant improvements made in Budget 2007 & 2008. The ceiling for mortgage interest relief for first-time buyers was doubled in Budget 2007 from €4,000 single/€8,000 married to €8,000 single/€16,000 married. The ceiling for first-time buyers was further increased in Budget 2008 to €10,000 single/€20,000 married.

In addition, the Government announced the introduction of a new mortgage scheme in the context of Budget 2009. The Home Choice Loan has been introduced through the local authority system, backed by loan finance raised by the Housing Finance Agency. HCL is available to first time buyers of new houses (or self-builds), subject to a maximum loan of €285,000 or max LTV of 92% (whichever is the lesser) and income thresholds. The Regulations to underpin the scheme were signed in December and the scheme commenced on 1 January 2009.