The new governor of Central Bank, Philip Lane, earlier this month told The Irish Times that the mortgage rules will be reviewed beginning this summer. With that, the controversial lending rules that were introduced last year will remain as is and may take up to autumn should there be changes to be made.
Minister for Finance Michael Noonan first called for a review in mortgage cap for first-time homebuyers back in September. Most recently, DNG, a leading estate agency, has called for Central Bank to adjust its mortgage lending rules and allow first-time buyers to borrow as much as €300,000 with no more than 10 percent deposit, Irish Independent reported.
Currently, applicants who are buying a home for the first time can qualify for a mortgage loan amounting to 3.5 times of their income. DNG wants that changed to four times instead. For a loan of €220,000, borrowers are presently charged with 10 percent deposit, and 20 percent deposit if the amount is more than that.
Lane said that the Central Bank is open in modifying the rules where applicable and necessary, although he said that the new lending regime is going to stay.
"The rules, I think, could be adjusted upwards or downwards. It's not the case that the Central Bank picked the most severe rules. Those rules can be adjusted, recalibrated, but it's not the case that we'd expected to see [this reviewed] every quarter," Lane, who assumed as the bank's governor in November last year, stressed.
Meanwhile, these very mortgage rules are what caused the Central Bank of Ireland to receive the "Central Bank of the year Award" from Central Banker Magazine. The judging panel highlighted that the new residential mortgage lending rules introduced in Ireland have helped curb house price growth, as well as price expectations in 2015.