Mortgage Rule Changes from January 2023: Easing of Lending Limits

Mortgage rule changes leading to easing of mortgage lending limits will mark the start of 2023. The Irish Central Bank announced that mortgage borrowing limits were to be eased with the effects coming into practice in January 2023. It was something that is welcome on the backdrop of wages not quite having caught up with inflation and rising house prices.

With inflation and energy prices soaring through the roof this year, it may have seemed overly optimistic to hope for quick and effective housing solutions. However, on the 19th of October, a small glimpse of hope emerged for prospective buyers.

What Are The New Mortgage Rule Changes?

Prospective first time home buyers will be able to borrow up to four times their income when applying for a mortgage, as of January 2023.

As a result, this will make owning a home more attainable, especially for those on lower income salaries or single applicants, for example.

Continue reading to see our breakdown of the major changes.

First Time Buyer

First-time buyers can now borrow up to 4 times their income and the deposit amount still remains 10%.

Also, the following categories have been added to the first time buyer definition:

  1. Borrowers who are divorced
  2. Separated
  3. Have undergone bankruptcy / insolvency and
  4. FTBs who get a top-up loan or re-mortgage with an increase in the principal.

Second Time Buyer

Second time buyers can borrow up to 3.5 their income, but they will only need a 10% deposit now.

Will The New Mortgage Rule Changes Affect Property Prices?

We have received a lot of questions from worried first time buyers who want to know will the new rules result in property prices increasing.

This is very hard to predict, especially before the rules come into effect. Time will only tell. First time buyers will most certainly benefit from the easing of borrowing limits. Those who are on low income salaries will also gladly welcome these new changes.

However, lenders still need to remain prudent when lending and although first time buyers can possibly borrow 4 times their gross income, they may not necessarily qualify for it. Lenders take many factors into account when deciding how much to lend, including loans, children and other expenses affecting the capacity of applicants to repay a mortgage.

Not Sure Where to Start?

If you are still unsure how much you can or can’t borrow, don’t worry!

Our brokers are here to help and will provide support and advice on (061) 599990.

Mortgage Guide

Get the information you need to start your journey to buying your dream home!

Mortgage Checklist

A list of the key documents you need when applying for your mortgage.

After AIP Guide

If you have Approval in Principle, this guide will help you with the next steps.