€220,000 cap for first-time buyers to be removed

The news was announced this afternoon.

The Central Bank will remove the €220,000 cap on mortgage lending for first-time buyers. The rule requiring first-time buyers to have a deposit of 20% on properties above a certain value will be scrapped. This means that first time buyers will be able to borrow up to 90% of a value of a home, with a requirement for a 10% minimum deposit. The 20% minimum deposit requirement (i.e. maximum Loan To Value ratio of 80%) continues to apply to second and subsequent buyers. The new restrictions will come into effect on January 1, 2017. The current restrictions were introduced last year in a bid to help regulate the housing market and prevent it from overheating once again. Under the current cap, first time buyers must have a 10% deposit on all homes valued up to €220,000 and a 20% deposit on all homes in excess of €220,000.