Central Bank expected to relax mortgage lending rules

Announcement is expected on Wednesday morning
Central Bank expected to relax mortgage lending rules

The Central Bank is expected to announce changes to the mortgage lending rules on Wednesday.

Currently, people can only borrow three and a half times their salary. There are also strict requirements when it comes to deposits required to secure a property.

The strict conditions have been blamed for keeping large number of potential buyers out of the housing market. However, there are also concerns that any easing could lead to further upward pressure on house prices at a time when they are close to record highs.

Reports suggest the new rules could expand the current loan-to-income cap to four times earnings, in line with the lending limits in other countries.

There are also conflicting reports on whether the Central Bank will change the current deposit rules, which require first-time buyers to have a house deposit of 10 per cent, and 20 per cent for second-time buyers.

There are exemptions to the rules for some borrowers, but the restrictions have been in place for seven years.

The Central Bank has been conducting a mortgage framework review for over a year, consulting with homebuyers and people within the industry. Bankers have insisted for some time that the restrictions are too tight and have to be loosened.

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