Joan Collins (Dublin South Central, United Left)
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239. To ask the Minister for Finance the new Central Bank of Ireland's loan-to-value and loan-to-income limits (details supplied). [6113/15]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank of Ireland has now announced the details of its new macro prudential regulations for residential mortgage lending. These provide for the following measures;-

Principal dwelling house (PDH) mortgages are subject to a Loan to Value (LTV) limit of 80% of the value of the property;

- For first time buyers,  the LTV limit in respect of a PDH mortgage is 90% up to a value of €220,000 and 80% on any excess value over that amount;

- Buy to Let (BTL) mortgages are subject to an LTV limit of 70%;

- PDH mortgage loans are also subject to a loan to income (LTI) limit of 3.5 times gross income.

The central Bank has informed me that lenders, however will have a certain limited discretion to exceed these limits if they so choose.  These macro prudential measures are complementary to existing micro-prudential supervision and to lenders' own risk management practices. They are not intended to capture credit risk associated with a particular loan or borrower, nor to replace or substitute for a lender's existing internal credit assessment policies and procedures, but rather to reinforce and strengthen the existing suite of credit risk mitigation tools employed by prudent lenders. Credit institutions will have internal policies in relation to specific risks or products and individual banks are free to adopt stricter measures as part of their underwriting decisions and their individual risk management practices.