Noel Rock (Dublin North West, Fine Gael)
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167. To ask the Minister for Finance his plans to recommend to the Central Bank a change in mortgage rules, specifically in relation to the ratio of 3.5:1 that is set between borrowing and income. [15688/16]

Michael Noonan (Limerick City, Fine Gael)
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The existing Central Bank macro prudential measures for residential mortgage lending provides, inter alia, for a principal dwelling mortgage loan limit of 3.5 times gross annual income.  It should, however, also be noted that this is a proportionate limit and that lenders have a discretionary flexibility, subject also to compliance with the provisions of the Consumer Protection Code and other relevant regulations including now the provisions of the Mortgage Credit Directive regarding the obligation to assess the creditworthiness of a consumer borrower, to exceed that loan to income threshold by up to 20 per cent of the euro value of all new lending on an annual basis for principal dwelling homes purposes. 

As the Deputy is aware, the new Programme for a Partnership Government (PfPG) provides for a range of measures which seeks to improve the supply of housing and to protect and promote home ownership.  It also states that the Government will work with the Central Bank in the context of its up-coming review of its mortgage lending limits.  The Central Bank will commence this process tomorrow, June 15, and my Department will engage with the Central Bank on this.  In addition, as Minister for Finance, I will also need to be consulted in due course on any new revised macro prudential regulations that the Central Bank may decide to be put in place arising from this review.  However, in this process it should also be recognised that the Central Bank has a mandate to promote and protect financial stability and that it has an independence in the formulation of macro prudential measures towards the achievement of that objective.