This month the Central Bank announced proposals to restrict mortgage lending to try and prevent another property price “bubble”.
LTV Restrictions
The proposal involves telling lenders that 85% of their home loans (in value terms) must be less than 80% of the value of the home. (80% Loan to Value or LTV). Currently many lenders are dishing out mortgages of up to 92% LTV. A higher LTV means a lower deposit is required by the buyer. An 80% mortgage on a €250,000 house will require a deposit of €50,000 – whilst a 92% mortgage would only require the buyer to find a deposit of €20,000 .
Loan to Income Ratio : (LTI)
Lenders usually lend up to a certain multiple of the buyers income(s). The proposals from the Central Bank also include restricing lending so that no more than 20% of a lender’s mortgages can be above 3.5 times LTI.
If the proposals become mandatory – it will still be possible to get a mortgage of more than 80% or more than 3.5 times income – but it will be much harder.
If you are looking for a mortgage – here are the current Best Mortgage Rates at 90% LTV
| EBS | 1 year fixed | 3.5 % |
| Haven | 1 year fixed | 3.5 % |
| KBC | 1 year fixed, | 3.5 % |
| AIB | 1 year fixed, | 3.5 % |
| Bank of Ireland | 1 year fixed | 4.1 % |
| EBS Limited | 3 year fixed | 4.2 % |
| Haven Mortgages Limited | 3 year fixed | 4.2 % |
| Ulster Bank | 3 year fixed | 4.25 % |
| KBC | 3 year fixed, | 4.3 % |
| KBC | 2 year fixed | 4.35 % |
| Bank of Ireland | 2 year fixed, | 4.35 % |
| Bank of Ireland | 2 year fixed, | 4.35 % |
| EBS | Variable | 4.45 % |
| KBC | Variable | 4.47 % |
| Haven | Variable | 4.49 % |
| AIB | Variable | 4.49 % |
| Bank of Ireland | Variable | 4.5 % |
Note : Bank Of Ireland are offering a 1% cashback deal on all mortgages for house purchases. On a €250,000 house that would mean a lump sum of €2500. That would come in handy for furniture and other expenses. (or stamp duty).