Fianna Fáil TD for Mayo Dara Calleary says hundreds of families across Mayo will be trapped in their homes, unable to trade up, because of new Central Bank rules on mortgage lending. Under the new regulations non-first time buyers will have to save a 20% deposit in order to secure a home loan.
Deputy Calleary commented, “While the easing of the rules for first time buyers is welcome, the situation for people wishing to trade up from their starter home has been made much more difficult, and could result in families across the county finding themselves trapped in houses or apartments that are no longer suitable for their needs.
“The deposit needed to secure a mortgage of €300,000 is €60,000; a vast sum for any family to save, especially if they are already repaying a mortgage on their first home. In many cases this could simply prove impossible. These Central Bank rules are extremely onerous and do not take ability to pay into consideration. Families who have never missed a mortgage repayment will be penalised because they are unable to come up with a 20% deposit.
“Many people in Mayo bought at the height of the boom and now find themselves in negative equity and may not be able to save the required deposit levels. This will effectively rule them out of ever finding the funds to ever buy a new home, and is extremely unfair. In its submission to the Central Bank, Fianna Fáil expressed concern about how these rules would impact first time buyers, however while rules for first time buyers appear sensible, the situation for people looking to trade up has been made infinitely more difficult”.