Tighter lending rules to prevent housing bubble

The majority of home-buyers will in future have to put down a 20% deposit and be able to borrow a maximum of 3.5 times their salary, according to new rules by the Central Bank.

The new macro-prudential rules are aimed at preventing another housing bubble from wreaking havoc across the economy. From January next year, only 15% of the entire value of a bank’s mortgage lending can comprise mortgages with a loan-to-value ratio greater than 80%.

Furthermore, 80% of mortgage customers in value terms will be able to borrow a sum no greater than 3.5 times their salary.