Background
Under the Central Bank rules for mortgage lending, the maximum mortgage amount allowable is 3.5 times the assessable income of the applicant(s). This is called the loan to income (LTI) limit. There is a second cap on mortgage lending, known as the loan to value (LTV) limit. The maximum LTV for first time buyers (FTBs) is 90%. In other words, FTBs need a minimum deposit of 10% of the purchase price. For everyone else (known as second and subsequent buyers, or SSBs), a deposit of at least 20% of the purchase price is required.
Exceptions to the Central Bank Mortgage Lending Limits
Each lender has a quota of exceptions that they can make in each calendar year, i.e. mortgages drawn down from January to December:
- LTI exceptions for FTBs: 20% of total mortgage loans to FTBs can be above 3.5 times incomes
- LTI exceptions for SSBs: 10% of total mortgage loans to SSBs can be above 3.5 times incomes
- LTV exceptions for SSBs: 20% of total mortgage loans to SSBs can be above 80% LTV
Confused? Join the club! Bottom line is, if the mortgage you require is not within any of the above limits applicable to you, then you need an exception.
Are the Mortgage Lenders Still Offering Exceptions?
Yes, but only because they are even harder to get than before. In 2018, most of the mortgage lenders had run out of exceptions by around July (a few had run out by April!). However, they are all managing to keep exceptions open for longer in 2019. At the time of writing (July 2019), all of the lenders still have exceptions available. This is mainly due to tougher qualifying criteria which most lenders implemented from the start of this year. A couple of the banks have tightened these measures even further as the year has progressed.
While keeping exceptions open for longer is to be welcomed, the downside of the stricter criteria is that far fewer people can get approved for an exception. However, it must be said that the new policies are working, as all lenders are still offering them right now.
How Do I Find Out Exactly What I Can Get Approved For?
Just contact us! We will let you know very quickly whether it may be possible to get approved for a mortgage exception, and for exactly how much. Simply fill in the contact form below or call our dedicated mortgage line on 01 4352335.
About MMPI
MMPI is an award-winning Irish broker that offers free mortgage advice. Our expert mortgage advisors will guide you through the mortgage approval process and will advise you on the best options available to us that match your specific needs.
