Irish central bank eases deposit rules for first-time home buyers

The Central Bank of Ireland said on Wednesday the ceiling on the loan to value ratio for all first-time home buyers will be set at 90 percent.

This is a shift from the current requirement, which puts the ceiling at 90 percent for loans up to 220,000 euros(232,000 U.S. dollars) but at 80 percent for the balance of loans above 220,000 euros, it said.

This means that first time buyers will be able to borrow up to 90 percent of a value of a home, with a requirement for a 10 percent minimum deposit, it added.

But the 20 percent minimum deposit requirement continues to apply to second and subsequent buyers, according to the central bank.

Meanwhile, the structure of the proportionate loan to value allowances is amended, it said.

On Wednesday, the Irish central bank announced the outcome of the review of the mortgage measures, following an extensive consultation and evaluation process.

The mortgage measures were introduced in February 2015 to enhance the resilience of both borrowers and the banking sector.

According to the central bank, five percent of the value of new lending to first time home buyers will be allowed above the 90 percent loan to value limit and 20 percent of the value of new lending to second and subsequent buyers for primary residences will be allowed above the 80 percent loan to value limit.

This replaces the current requirement which allows 15 percent of total lending for primary dwellings above the loan to value limits.

The current two-month valuation period will be extended to four months in recognition of the fact that a portion of house sales can take longer than the average three months to conclude, it said. Enditem