Central Bank to issue rules for homebuyers this week

The Central Bank will announce new mortgage rules this week that will include a final decision on whether or not homebuyers will be required to have a 20 per cent deposit, Government sources have confirmed.

Last week, Central Bank governor Patrick Honohan accepted there had been a lot of opposition to plans to require prospective homebuyers have one-fifth of the home purchase price on deposit.

The plan to change loan-to- value ratios for home loans will form the central plank of the new rules. The bank is also set to impose a maximum limit of 3½ times income for the value of the loan.

Some have suggested a 15 per cent deposit requirement with a provision that it might increase over time.

The new rules are likely to be discussed by Cabinet at its weekly meeting.