Dáil Éireann Debate, Wednesday - 4 February 2015
66. Deputy Bernard J. Durkan asked the Minister for Finance if he is satisfied regarding the extent to which lending agencies are meeting the borrowing requirements of home owners; the extent to which such loan applicants are capable of competing with the investment sector; and if he will make a statement on the matter. [5175/15]
View answer68. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which the various lending institutions are currently meeting or intend to meet the mortgage requirements of first-time home buyers; the way the requirement in this regard has been met in the course of the past 12 months in comparison with lending to the investment sector for house property; and if he will make a statement on the matter. [5177/15]
View answerI propose to take Questions Nos. 66 and 68 together.
The latest data on new mortgage lending issued by the Banking and Payments Federation shows that, albeit coming off a low base, mortgage lending continues to increase. In the third quarter of 2014 (the latest quarter for which information is available) new mortgage lending surpassed the €1bn mark in a quarter for the first time since 2010. In the year to end September 2014, some €2.5bn in residential mortgage loans was drawn down which compared to circa €1.6bn in the same period in 2013. Furthermore almost 93% of all new mortgage lending in the third quarter of 2014 was to first time buyers or to those moving property in respect of an owner occupied property.
As the Deputy will be aware, the Central Bank of Ireland has recently announced new macro prudential regulations for residential mortgage lending. First time buyers will be subject to a maximum mortgage LTV of 90% for a property valued up to €220,000, and subject to an 80% LTV on any excess value above that amount. For non first time buyers, a mortgage will be limited to 80% of the value of a principal dwelling house.
However, investors who wish to purchase a buy to let property will have to meet a higher deposit threshold when borrowing from a bank to fund the purchase. Such borrowers will be subject to a loan to value ratio of 70% meaning that they will have to have 30% deposit in order to obtain a mortgage on a buy to let property.
