Dáil Éireann Debate, Thursday - 28 September 2023
189. Deputy Richard Bruton asked the Minister for Housing, Local Government and Heritage if the increase in the Central Bank recommendation on raising the ratio of mortgage to income from 3.5 to 4.0 has been fully carried over into the terms of first homes and of a local authority's affordable purchase schemes, and if he will outline how the approved equity injection is now calculated. [41977/23]
View answerThe raising of the ratio of mortgage to income from 3.5 to 4 times for first-time buyers, as mandated by the Central Bank of Ireland, came into effect on 1 January this year. With regard to the First Home Scheme, this change was carried over on the same date. Full details of the First Home Scheme are available at: www.firhomescheme.ie.
The Local Authority Affordable Purchase Scheme is governed by the Affordable Housing Act 2021 and its associated Regulations. The ratio of mortgage to income change was fully incorporated into updated Regulations (Affordable Housing Regulations, and Affordable Housing (No.2) Regulations), which I signed on 27 January this year.
In the case of both schemes, the equity is still calculated as a percentage of the open market value. In the case of the First Home Scheme, the equity is calculated based on the monetary support provided to bridge the gap between a purchaser's mortgage capacity and deposit, and the market price. In the case of the Local Authority Affordable Purchase Scheme, the equity is calculated on the difference between the market price and the purchase price.
