Barry Ward (Dún Laoghaire, Fine Gael)
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319. To ask the Minister for Finance his views on the merits of providing low interest, Government-backed bridging loans for people seeking to move home and are unable to do so due to the cost of finance; and if he will make a statement on the matter. [34279/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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There is a legal and regulatory macro prudential and consumer protection framework in place which governs the provision of residential mortgages to consumers by banks and other Central Bank regulated mortgage providers.

There are a number of consumer protection requirements governing the provision of mortgage credit to consumers. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 ('CMCAR') provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate.

Furthermore, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved and provide these reasons on paper if requested.

In relation to bridging finance, this is generally regarded as a form of relatively short-term finance until it is either repaid or refinanced by an alternative (and presumably more long term) form of credit. Bridging finance, which can be secured or unsecured (and can also be provided for a purpose other than housing), is not specifically referenced in the Central Bank lending rules.

However, where bridging finance is provided to consumers (by a Central Bank regulated lender) which is secured on residential property it is subject to the mortgage lending rules in the same way as any other type of mortgage credit provided to consumers for a housing purpose. Therefore, such mortgage applications and lending will have to be considered in the context of both the LTV and LTI measures associated with such lending.

Banks and other regulated mortgage lenders can utilise their allowances to provide a certain amount of mortgage credit in excess of the lending thresholds. Including the LTI threshold if that is a relevant factor in the case of any particular application for bridging type finance for a housing related purpose.

However, within this applicable mortgage regulatory framework, it remains a matter for each lender to determine their own credit policies such as the types of credit they wish to offer to the public. It is also a matter for them in the setting and adjustment of the interest rate and also to make their own decisions on individual applications for mortgage or other credit, including bridging finance and to decide whether or not to utilise the available lending allowances and the particular mortgage applications in respect of which it wishes to utilise the lending allowances.

There is no legal or regulatory provision which prevents lenders from providing bridging loans and so the decision of whether or not to provide such finance and the setting of the interest rate for bridging finance is a commercial matter for any individual lender.

As Minister for Finance, I do not have a role and cannot become involved in such commercial decisions made by lenders.