Mortgage moves contradict Irish Central Bank policy

Government intervention on standard variable-rate mortgages is a middle-class plea bargain that contradicts Central Bank policy on curtailing credit, a leading analyst has claimed.

Mortgage moves contradict Irish Central Bank policy

Lowering standard variable rates will inevitably add further credit to the system by reducing the stress tests with which banks must comply, thus opening lending up to a larger proportion of the population, according to Karl Deeter of Irish Mortgage Brokers.

This would have the opposite effect of policies introduced by Central Bank which seek to limit the amount of credit available in the market, such as the loan-to-income and loan-to-value limits introduced last year.

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