Dáil Éireann Debate, Thursday - 11 November 2021
276. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage if he will initiate changes in the local authority and Rebuilding Ireland housing loan system to ensure that families paying a high rent, very often higher than what a mortgage would cost, can have a realistic opportunity of housing themselves by way of a loan from the local authority; and if he will make a statement on the matter. [55419/21]
Amharc ar fhreagra292. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage if consideration of the applicants’ history and duration of renting will be taken as a means of reducing the deposit requirement in respect of affordable housing in order to alleviate the burden on families seeking Rebuilding Ireland and local authority loans given that renting costs are in many cases higher than mortgage costs; and if he will make a statement on the matter. [55436/21]
Amharc ar fhreagraI propose to take Questions Nos. 276 and 292 together.
The Rebuilding Ireland Home Loan, which is operated by my Department, is designed to enable creditworthy first-time buyers, who are unable to access a mortgage from a commercial lender, to obtain sustainable mortgage lending to purchase a new or second-hand property.
To support prudential lending and consistency of treatment for borrowers, a Loan to Value ratio of 90% applies to the Rebuilding Ireland Home Loan as per the Central Bank's prudential lending guidelines. Therefore, in order to avail of the loan, applicants must have a deposit equivalent to 10% of the market value of the property.
Further information is available on the dedicated website www.rebuildingirelandhomeloan.ie
For prospective purchasers of newly-built properties, the availability, through the Revenue Commissioners, of the Help to Buy Initiative for first-time buyers may provide additional assistance to prospective applicants for the Rebuilding Ireland Home Loan.
www.revenue.ie/en/property/help-to-buy-incentive/index.aspx
As part of Housing for All, I announced a reformed successor to the Rebuilding Ireland Home Loan Scheme, the 'Local Authority Home Loan'. The Local Authority Home Loan will include an increase in the income ceiling for single applicants which will increase home ownership in areas where house prices are higher.
For counties where the scheme’s house price limit is €320,000 (Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow), the income ceiling for a single applicant will be €65,000. This will be an increase of €15,000 on the €50,000 income ceiling under the current Rebuilding Ireland Home Loan scheme. In the rest of the country where the scheme’s house price limit is €250,000, the income ceiling for a single applicant will remain €50,000. The income ceiling for joint applicants is €75,000. This measure will have a significant impact on a single person’s borrowing capacity and supports the policy objective of supporting home ownership.
I have already implemented a reduction of the mortgage interest rate for new borrowers by 0.25% under the existing Rebuilding Ireland Home Loan (RIHL), as from 10 September 2021. This reduction has helped make repayments more affordable for all borrowers and increases their borrowing capacity. This lower rate will be retained for mortgages issued under the forthcoming Local Authority Home Loan scheme.
I look forward to announcing further details in respect of the Local Authority Home Loan in the coming months.
