IMF warns mortgage limits must stay in place

The Central Bank’s mortgage lending rules should be maintained to help head off the boom-bust economic cycles that have plagued Ireland and brought the country to its knees during the recession, the IMF has warned.

The US-based organisation said there is evidence the lending limits, which require borrowers to provide a 20% deposit and which caps home loans at 3.5 times gross income, are working.

Despite calls from prospective homebuyers and industry lobby groups for the loan-to-value (LTV) and loan-to-income (LTI) rules to be relaxed, the IMF has cautioned against doing so; saying more information is needed before any attempts are made at refining the limits.