Central Bank of Ireland update on Macroprudential Mortgage Lending

Michael D Not Higgins

http://www.centralbank.ie/publications/Documents/Economic%20Letter%20-%20Vol%202016,%20No.%206.pdf

FTBs are on average:
34 years old
Borrow 180k
Average property price 244k
Average LTV 78%
57% are single borrowers (surprising to me)

SSB on average:
41 years old
Borrow 211k
Average property price 380k
Average LTV 66%
Average income of 105k
71% couples

http://www.centralbank.ie/publications/Documents/Household%20Credit%20Market%20Report%202016H2.pdf

More detail on the above figures.

Lots of good graphs showing the decline in household debt (despite still being one of the worst in Europe).

Still the worst in Europe for mortgage default.

Michael D Not Higgins

From the first link:

FTBs with an exception to the LTV limits on average:

Same ages as all FTBs, 34
Income 60% higher (64k v 103k)
Loan 70% higher (174k v 296k)
LTI slightly higher (2.8 v 3.1) but well within limits
LTV higher (78% v 89%)

FTBs with an exception on LTI limits on average:

Nearly same age (33)
Income slightly lower (66k v 61k)
Loan 33% higher (173k v 231k)
LTI higher (2.7 v 3.9)
LTV nearly the same (78% v 79%)

Definitely shows the exceptions are going to those with additional capacity in the other metric.

Michael D Not Higgins

Hopefully someone can help me decipher these.



This graph shows the spread of LTI and LTV of First Time Buyers with and without LTV exceptions. That's fine, it shows that no-one without an LTV exception is getting an LTV greater than 90%. However, the rules say you can't get an exception to both the LTV and LTI, so why are there some of the LTV 'with' bars going above 3.5 LTI and even above 4?

Edit: it's actually mentioned in the report "As noted earlier, some FTB and SSB borrowers had exemptions for both LTV and LTI. However, these are small in number (less than 1 per cent of the value of total in-scope lending for PDH purposes had both allowances)"
I was sure these were not allowed by the rules.

bleary

Yes. Didn't think it was allowed but very small number. I wonder if it's happening with self builds. For example an exemption is granted for loan to income and work starts. Costs overrun for some reason suddenly they are borrowing over 90%. The alternative might be to leave a half finished building to noones benefit.

uberwolf

the rules allow both.

REFLINE1

When will the review findings of the central bank rules be public?

Michael D Not Higgins

uberwolf wrote: »

the rules allow both.

The media at the time were reporting otherwise. However, it does appear to be the case for only a handful of mortgages so I'm sure they were the exceptions to the exceptions to the rule.

Another interesting result is that no one got a mortgage above 4.5 LTI.