Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

215. To ask the Minister for Housing, Planning, and Local Government the way in which the calculation of net disposable income works in relation to the Rebuilding Ireland home loan; the living expense allowances that apply, for example, in respect of a couple for food, heat and other essential living expenses; and if he will make a statement on the matter. [8978/18]

Eoghan Murphy (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Following a review of the two existing local authority home loan schemes, the House Purchase Loan and the Home Choice Loan, a new loan offering - the Rebuilding Ireland Home Loan - was introduced on 1 February 2018. 

Rather than applying a Loan to Income (LTI) limit to the new loan, a maximum permissible Net Disposable Income (NDI) ratio of 35% is used which more accurately reflects the benefits of the low fixed rate available for the full term of the Rebuilding Ireland Home Loan.  

The calculation for NDI is based upon after tax allowable income percentages, taking account also of the Universal Social Charge.  An applicant’s NDI ratio is calculated from the annual repayments on all loans, including the current application, and any maintenance payments, as a % of their Net Disposable Income.  The maximum ratio permitted is 35%.  This means that loan repayments in total cannot exceed 35% of a borrower’s after tax monthly income.