The new mortgage rules - what they mean

 

l * A 90 per cent loan to value limit on amounts up to €220,000 for first-time buyers. So a buyer of a principal residence of €220,000 must have a deposit of €22,000.

l * For first-time buyers purchasing more expensive homes,the 90 per cent loan to value limit applies on the first €220,000 and 80 per cent on the balance. So a buyer of a €350,000 property must have a deposit of €48,000.

l * For non first time buyers of principal residences, an 80 per cent loan to value rule will apply on the whole amount.So for a €400,000 home, an €80,000 deposit minimum is required.

l * For buy-to-let mortgages a 70 per cent loan to value ratio will apply. So for a property of €400,000, a €120,000 deposit is required

l * Loans for primary residences can be no more than 3.5 times the gross income of borrowers.

l * Banks will be allowed to exceed the LTV limits in 15 per cent of cases - by value - and the income limits in 20 per cent of cases, again measured by value.

l * The LTV limits will not apply for those in negative equity who are trading up. Switcher mortgages and housing loans for the restructuring of mortgages in arrears or pre-arrears are not in the scope of the regulations.

The new rules are effective immediately.