'Not Celtic Tiger era': Mortgage changes announced allowing five times income to be borrowed
First-time buyers will be able to borrow up to five times their income
For the first time since the Celtic Tiger era, people in Ireland will be able to borrow up to five times their income.
The new rule was announced this morning and applies to first-time buyers.
It was an initiative set up by mortgage lender Núa Money, who claim the move is not a return to Celtic Tiger era standards, according to the Irish Independent.
Central Bank rules state that a first-time buyer must have a 10% deposit for their home and only allows four times their income to be borrowed.
However, mortgage lenders can apply an exception to this rule at times.
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Not all banks offer exceptions, and usually only do so up to four-and-a-half times a borrower's income.
Núa Money has been in operation for less than two years and has never offered an exception, but it recently raised interest rates on fixed-rate mortgages, making it one of the most expensive lenders in the market.
"We have not done exemptions to date. We are now opening up the exemptions bucket, but this is not a return to Celtic Tiger-era lending. We are being prudent," Fergal O'Leary, Núa’s Chief Commercial Officer, said.
Those hoping to borrow five times their income would have to follow "strict lending criteria," including being in stable employment, having a clean credit history, and having the ability to demonstrate repayment ability.
Mr O’Leary said each application would be assessed on a case-by-case basis, and five times the applicant's income would be the maximum loan offered.
He added that he is aware it is only a very small number of people who are likely to borrow that amount of money.