Strong support for change to mortgage lending rules, survey finds

Central Bank says it does not plan to loosen restrictions

A new survey has revealed strong support among consumers for a loosening of the Central Bank’s current mortgage lending rules, with almost two-thirds saying they favoured raising borrowing limits.

The Central Bank said last week it would not make any major changes to its mortgage rules, which limit borrowers to loans amounting to 3.5 times their income, with a 10 per cent deposit for first-time buyers and 20 per cent for movers and second time borrowers. A limited number of exemptions to the rules are allowed each year.

The research, carried out by Red C on behalf of, found 64 per cent of people are in favour of allowing mortgage seekers to borrow above the limit if they can demonstrate their ability to repay.

Only 18 per cent are against increasing the limit, and 13 per cent remained neutral.


Those in the 35-44 age group were most likely to back the relaxation of the loan-to-income rule.


There was also widespread support for relaxing the deposit requirements, with 53 per cent saying the 10 per cent minimum deposit for first-time buyers should be lowered, versus 27 per cent opposed to changing the measures.

Some 41 per cent backed the removal of the deposit requirement completely, on the condition that borrowers could demonstrate ability to pay.

The survey questions 1,000 adults in the Republic during November.

"No one wants a return to the reckless lending of the past. However, the current rules, while well intentioned, would appear to be helping contribute to a dysfunctional housing market as in almost every area of the country it is now cheaper to buy a property than it is to rent – which should never be the case – as people can't get a mortgage of sufficient size or save up the deposit," said Daragh Cassidy, head of communications at

“However, we need to be careful about what we wish for. Given the limited supply of housing at the moment, any loosening of credit rules without a corresponding increase in the level of housing output, could simply lead to an increase in property prices, leaving prospective home buyers in no better a position.”

He described the current loan-to-income rule as “somewhat crude” as it didn’t fully take into account ability to repay.

“A rule based on the size of the mortgage repayment as a percentage of someone’s net disposable income would surely be better,” he said.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist