Irish central bank eases mortgage-lending limits

© Reuters. FILE PHOTO: A man walks past the Central Bank of Ireland in Dublin, Ireland, February 11, 2022. REUTERS/Clodagh Kilcoyne

By Conor Humphries

DUBLIN (Reuters) – Ireland’s central bank is to ease mortgage-lending limits to allow first-time property buyers to borrow up to four times their income, it said on Wednesday following a review of lending rules designed to prevent a lending bubble.

The central bank introduced limits in 2015 capping how much banks can lend for the purchase of a home relative to its value and the borrower’s income in a bid to prevent a repeat of excessive lending that devastated the economy over a decade ago.

Currently lenders can only offer loans up to 3.5 times the income of first-time buyers. That is set to rise to four times from January, the bank said. The 3.5 times limit will remain for other buyers.

The bank also raised the loan-to-value limit for those buying for the second time to 90% from 80%, putting them in line with current limits for first-time buyers.