LTI rule where borrower has existing mortgage

[FONT=&quot]P[/FONT][FONT=&quot]art of the over-indebtedness of households in this crisis comes from the presence of additional secured or unsecured borrowings from multiple sources. A cap on mortgage LTI does not deal with this aspect and could result in leakage through additional non-mortgage borrowing, frustrating the aims of the measure. One theoretical approach to this problem of potential leakage would be to apply a ceiling also to the household’s total debt-to-income (DTI) ratio. Such ratios take into account a borrower’s total debt and are therefore, if they can be enforced, more effective in constraining the build-up of household debt. However, this ratio requires a comprehensive view of all a borrower’s debts, which has been more difficult for the lender to obtain reliably given the absence in Ireland of a Central Credit Register. ...[/FONT]

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[FONT=&quot][/FONT][FONT=&quot] Pending the availability of this Register, it would be premature to attempt to establish realistically enforceable regulations on total debt. Lenders must nevertheless seek to inform themselves about total borrower indebtedness and limit their lending accordingly, as per their requirements under the Consumer Protection Code 2012.[/FONT]

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Residential Investment Properties

Lending for residential investment properties is so different from lending for an owner occupied house, that they should be the subject of separate regulations.
The LTV limit should be set at 70% of their overall portfolio of properties – including their home.
For example, if an investor owns their own home worth €1m mortgage-free, there should be no restriction on borrowing 100% of the cost of an investment property worth €200,000 as the overall LTV of the portfolio would be just 17%.
On the other hand, if someone is at the limits of their LTV and LTI for their family home, they should not be allowed to buy an investment property.

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[FONT=&quot]6[/FONT][FONT=&quot]. Loan to Income[/FONT](1) A lender shall ensure that the total aggregate value of High Loan to Income
Housing

Loans it enters into in a half year period does not exceed 20 per cent of all
housing loans for principal dwelling homes it enters into in that half year period.

(2) Paragraph (1) shall only apply to housing loans for principal dwelling home
purpose.

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‘High Loan to Income Housing Loan’ means a housing loan or the total sum of housing loans provided by a lender in respect of an individual residential property under which the total amount advanced meets or exceeds a multiple of
3.5 times the borrower’s income at the time at which that income is assessed by the lender for the purpose of entering into the housing loan.

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