Most people seeking a mortgage from next year will be restricted to borrowing a maximum of 80% of the cost of the property.
It is just one of a number of new rules from the Central Bank in order to prevent another property market bubble.
Borrowers will in the main also be restricted to borrowing around three-and-a-half times their income.
The new rules will be on top of normal prudent lending by banks such as stress tests on borrowers.
Deputy Governor at the Central Bank Cyril Roux says some mortgages that break the new rules will be allowed.
Mr Roux said: "That's why we introduced proportionate caps and we allow for exemptions as well.
"So there is a budget for banks to give loans over the 3.5 times mark and over the 80% mark. What we don’t want is for banks to give that to a very large fraction of their clients."