Brendan Burgess
Founder
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Interesting [broken link removed]from the BPFI
Taking account of the current market place and the quality of new mortgage lending, we are proposing the following recalibration of the regulations to address issues that have emerged since their introduction in February 2015:
It should be noted that our recommendations do not seek to adjust the LTI cap and under this
proposed recalibration all FTB borrowers will continue to be required to meet the current 3.5x LTI
limit so that they can show affordability in terms of repayments. The primary assessment
methodology utilises NDI criteria which focuses on proving sustainable repayment capacity. This
combined with the requirement to meet a stress test measure of +2% on any mortgage before an approval can be provided will ensure that our proposed change will not result in borrower overindebtedness.
Taking account of the current market place and the quality of new mortgage lending, we are proposing the following recalibration of the regulations to address issues that have emerged since their introduction in February 2015:
- Increase the threshold for the First Time Buyer cohort from ‘up to 90% of €220,000 to ‘up to 90% of €300,000’
- Exempt equity release for home improvements from the LTV regulations
- Extend the two month time limit for valuation reports to four months
- Consider the difficulties encountered by those in the ‘Renters’ cohort and those second time buyers who have recently returned to a minor amount of positive equity
- Include a ‘safety tolerance’ within the current limits to allow for a smooth operation of the regulations
- Limit the data obligations for lenders to the specific requirements of the regulations.
It should be noted that our recommendations do not seek to adjust the LTI cap and under this
proposed recalibration all FTB borrowers will continue to be required to meet the current 3.5x LTI
limit so that they can show affordability in terms of repayments. The primary assessment
methodology utilises NDI criteria which focuses on proving sustainable repayment capacity. This
combined with the requirement to meet a stress test measure of +2% on any mortgage before an approval can be provided will ensure that our proposed change will not result in borrower overindebtedness.