Fiona O'Loughlin (Kildare South, Fianna Fail)
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167. To ask the Minister for Finance the affordability criteria that are considered by banks for a person buying their second home; and if he will make a statement on the matter. [39399/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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There are certain legislative and regulatory provisions governing the provision of residential mortgage credit to consumer borrowers. One of the key measures is the Central Bank of Ireland macro-prudential measures which apply proportionate loan-to-value and loan-to-income limits to mortgage lending by regulated financial service providers. For principal dwelling home mortgages, the loan-to-income limit is set at 3.5 times gross income though lenders have the flexibility to exceed that threshold each year in respect of up to 20 per cent of housing credit. More generally the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 places an obligation on lenders to assess the creditworthiness of residential mortgage borrowers and it also provides that credit shall only be made available where the assessment indicates that the borrower is likely to be able to meet the obligations of the proposed credit agreement. The Central Bank Consumer Protection Code also places a requirement on lenders to assess the affordability of credit, including a consideration of the personal consumer's ability to repay the mortgage on the basis of a 2 per cent increase in the mortgage rate above that offered to the borrower. (However, this test does not apply where the interest rate is fixed for a period of five years or more). Subject to complying with these legislative and regulatory requirements it is a matter for lenders to set their own mortgage credit policies and to make their own individual mortgage lending decisions. Ultimately, the decision on whether or not to provide credit, or the amount of credit to offer, in any particular case is a commercial decision for the individual lender. As Minister for Finance, I would not have a role in such commercial decisions.