Governor of Central Bank says mortgage rules change won't drive up house prices

The Governor of the Central Bank says he doesn't believe the change in mortgage lending rules will drive up house prices.

The Central Bank tweaked the rules for first time buyers yesterday, abolishing the requirement to have a 20% deposit over a threshold of €220,000.

Borrowers will now only have to save a 10 percent deposit regardless of the house price.

But Philip Lane says most people had to save a bigger deposit anyway, because their income wouldn't have been sufficiently high to get enough of a mortgage.

"73% of borrowers have a deposit larger than the minimum, in part that's because 3.5 times income LTI ceiling mean that to buy the house they need to raise a bigger deposit."