Wednesday, 28th January 2015
- Central Bank not proceeding with 20% mortgage deposit recognises financial pressures faced by first-time buyers.
- 10% deposit for first-time buyers on amounts up to €220,000
- First-time buyers of more expensive homes require 10% deposit on first €220,000 and 20% of balance
- Non-first time buyers require deposit of 20%
The decision by the Central Bank to revise its proposal for a 20% deposit and to make it easier for first time buyers to save for a deposit is a good one. For young people starting out in life trying to save for a deposit on a home can be a difficult task, this change in policy will help them to buy their first home.
The majority of first time homes in Cork fall under the €220,000 level which requires a 10% deposit. This will mean for most first time buyers they will now only need a 10% deposit. For other more expensive homes a further 20% deposit will be required for any amount above this level.
This will put in place a set of controls around mortgages and lending that will benefit everyone looking to buy a home. It will provide a set of rules that will help to control property prices. If we had a similar system in place over the last 10 years we would not have experienced the property bubble and its disastrous consequences that have affected so many families.
Although I broadly welcome the proposals, in particular the exemption from the requirements for people in negative equity, we must be careful to ensure that this decision does not result in unintended consequences. The Oireachtas must now ensure the effects of this policy are regularly reviewed so that we can make sure that it is helping to make homes affordable for families.”