There are regulations in place since 2015 , set up by the Irish Central Bank , that set certain restrictions on mortgage lending in Ireland.
These mortgage measures first came into force in February 2015 and were amended slightly in January 2017 and again in Jan 2018 . The lending rules were relaxed slightly from January 2023.
The mortgage lending restrictions in Ireland relate to
- The percentage of the house value that can be lent. ( The LTV or Loan to Value)
- Income multiples. ( the size of loans compared to the income of the borrowers. )
It is important to note that every individual mortgage is not subject to these exact limits . Banks can sometimes lend more than the specified limits in some cases. But they have to stick to annual targets on the amount of mortgage loans that they allow to go over these limits.
There are different limits for different categories of buyers:
A) Owner Occupiers: LTV Restrictions (Jan 2023 onwards)
- All residential home buyers are subject to a limit of 90% LTV.
So -on a 350,000 house , the maximum mortgage would be €315,00
(15% of lending can exceed this cap .) - Buy To Let buyers are subject to a limit of 70%
- Switcher mortgages and housing loans for the restructuring of mortgages in arrears or pre-arrears are not in the scope of the Regulations.
- Note – (Borrowers in negative equity who wish to obtain a mortgage for a new property are not within the scope of the LTV limits.)
B) Owner Occupier Mortgages – Income Restrictions 2023
There are also limits on the size of loans compared to the income of the borrowers.
The Loan to Income Ratio (LTI) on first-time buyer owner-occupier mortgages cannot be more than 4 times the borrower’s gross income. (This was increased from 3.5 in January 2023).
The Loan to Income Ratio (LTI) on second and subsequent buyer owner-occupier mortgages cannot be more than 3.5 times the borrower’s gross income.
Again – this limit is not strictly applied to every individual mortgage – but the banks must ensure annually that at least 85% of their home loans to owner-occupiers (by value) have this income restriction applied.
Note – in 2018 a total of 2,465 first-time buyers were allowed to breach the 3.5 times salary requirement.
( Note: Re-mortgages/switchers on the same residential property with an amount that is the outstanding mortgage balance at the date of the switch are exempt from these LTI limits.)
C) Buy to Let mortgage Restrictions (BTL)
BTL mortgages are subject to a limit of 70% LTV. Each individual mortgage is not subject to this limit – but the banks must ensure that at least 90% of their BTL mortgages each year (by value) have this LTV limit of 70% applied.
There are no income-related limits for Buy to Let mortgages.
See the Central Bank Pages On Mortgage Measures
First Time Buyers might be interested in reading about the Help to Buy Scheme that can provide up to 5% of the deposit on a new build homes for first-time buyers.
Check our tables of the Best Mortgage Rates in Ireland
See some examples of How Much You Can Borrow Here