Fianna Fail has criticised the new mortgage lending rules issued by the Central Bank last night saying they are unfair on families who want to trade up.
The new regulations offer some positive news for buyers, with the required deposit at 10% for first time buyer while a 20% deposit is now required for all others.
First time buyers will now be able to borrow 90% of the value of a property but only up to €220,000, after which the remaining figure will require a 20% deposit.
In addition to this, mortgages are limited to 3.5 times the buyer’s gross income. The cumulative effect of these regulations mean a first time buyer looking to buy a property for €350,000 will need to save €48,000 and earn a gross income of €86,000 to borrow the remainder.
Buy-to-let purchases will now require a thirty per cent deposit for all mortgages.
The Central Bank said today that the “key objective of these regulations is to increase the resilience of the banking and household sectors to the property market and to reduce the risk of bank credit and house price spirals from developing in the future.
Fianna Fail's finance spokesman Michael McGrath spoke to Newstalk Breakfast this morning and stated that the mortgage lending rules should have been gradually tiered up from 10% and that 20% requirement for people who are not first time buyers is excessive:
Economist Ronan Lyons also spoke to Newstalk Breakfast this morning and he claimed that second hand house prices in Dublin could take a hit in light of new Central Bank mortgage rules.
