Banks tighten 100% loan criteria

IRISH lenders are tightening the qualifying criteria for 100% mortgages — as some of Britain’s largest lenders begin to withdraw completely.

Irish banks are undertaking a re-assessment of the suitability of the 100% product as a result of market conditions, according to the Irish Bankers’ Federation.

An IBF spokesman said: “There’s a changed environment generally. In the pre-turmoil days it was easier from a risk assessment point of view to assess suitability but in recent months suitability has had to be reassessed.

“A number of institutions are taking stock of the situation in light of the new market environment.”

The Irish banks that offer 100% mortgages said they have no plans to scrap them but many are restricting who they lend to.

Director of the Irish Mortgage Corporation, Frank Conway, said there should be a drop in the take-up of 100% mortgages over the next six months.

“Since the end of last year lenders have been tightening the qualifying criteria for 100% mortgages. It is tougher to qualify for 100% mortgages but I can’t say if lenders will pull the plug completely on the 100% offering,” he said.

Following a review at the end of last year, Bank of Ireland said its 100% product is only available to defined occupation and employment types, the details of which remain confidential to BOI Group.

AIB meanwhile, said it has no plans to scrap the offering, which is only offered by the bank to people who can show a significant salary increase in three to five years and those who have the capacity to repay such a mortgage.

It has never offered the 100% product to the mass market.

The Ulster Bank Group, which includes First Active, said it reviews and updates its credit policies on an ongoing basis.