Central Bank publishes data on exceptions

[Brendan Burgess]

The Central Bank has also published data and commentary on new mortgage lending under the macroprudential measures in H1 2019. Six lending institutions submitted data to the Central Bank of Ireland on lending in H1 2019. Among its findings, the data reports that:

· A total of 18,260 loans were originated by six lending institutions in H1 2019, with a value of €4.2 billion.

· Sixteen per cent of the value of FTB lending had an allowance to exceed the Loan-to-Income (LTI) limit of 3.5.
Less than 1 per cent of the value of FTB lending originated above the LTV limit of 90 per cent.

· For Second and Subsequent Buyers (SSBs), 6 per cent of the value of SSB lending had an allowance to exceed the LTI limit,
while 16 per cent originated above the LTV limit of 80 per cent.

· The average LTV for FTBs was 80.7 per cent in H1 2019 up slightly from 79.5 per cent in H1 2018. The average LTI was unchanged at 3.1.

· The average LTV for SSBs was 68.1 per cent compared to 66.6 per cent in H1 2018 and the average LTI was unchanged at 2.6.

· Of the 9 per cent of loans exempt from the regulations, 92 per cent were refinances with no increase in loan size.

ENDS

 

[Brendan Burgess]

	limit	exceptions allowed	Exceptions granted
FTB LTV	90%	5%	1%
FTB LTI	3.5	20%	16%
SSB LTV	80%	20%	16%
SSB LTI	3.5	10%	6%

So increasing the LTV for FTBs won't make any difference as the banks are rarely using their exceptions.

If the LTI were to be increased, the banks would make a lot more exceptions.

In theory,they could make another 4% but, in practice, it is administratively difficult as they approve a lot more than are drawn down.

Brendan