QUESTION NO: 273
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Bernard J. Durkan
for WRITTEN ANSWER on 23/06/2015
To ask the Minister for Finance the extent to which comparisons have been made between the degree of lending to householders seeking mortgage accommodation in respect of purchase of their private house, as opposed to lending toward multi-unit developments; if any particular emphasis is being placed on the need to ensure mortgage facilities for private householders, thereby ensuring that they are not forced to rent continuously; and if he will make a statement on the matter.
Recent data from Banking and Payments Federation Ireland shows that €983 million in mortgage loans was drawn down in the first quarter of 2015 and that almost 90 per cent of this was in respect of owner occupier first time or mover purchasers.
From a regulatory perspective, the Central Bank of Ireland’s macro prudential regulations for residential mortgage lending have provided for a different treatment between borrowing for a primary home property and for a buy to let property. Regarding primary home loans, first time buyers will be subject to a maximum mortgage LTV of 90% for a property values up to €220,000 and subject to an 80% LTV on any excess value above that amount. For non-first time buyers, a mortgage will be limited to 80% of the value of the dwelling house.
However, investors who wish to purchase a buy to let property will have to meet a higher deposit threshold when borrowing from a bank to fund the purchase. Such borrowers will be subject to a loan to value ratio of 70% meaning that they will have to have 30% deposit in order to obtain a mortgage on a buy to let property.