I can't remember at the time why they rejected the DTI approach. Maybe it was the lack of a credit register.However, now that the consumer credit register is up and running, I think it would make sense to replace the LTI limit with a broader debt-to-income (DTI) limit of 4 or even 4.5 (the DTI ceiling in the UK).
I would agree with that, but I would keep the DTI at 3.5
Irish borrowers are very vulnerable to the Irish banks' predatory approach to mortgage rates. They are between 1% and 2% higher than the rest of the eurozone. They face no pressure from the government, the regulator or from foreign competition to reduce them. So if they decide to increase them by a further 1% independently of the ECB then there isn't anything stopping them.
If the banks removed the vulnerability by introducing 20 year fixed rates of 1.8% , then they could raise the LTI.