# 23% of the value of total FTB lending exceeded the 3.5 LTI limit; only 7 loans exceeded 90% LTV



## Brendan Burgess (2 Oct 2018)

In a Financial Stability Note, [broken link removed]_, _Christina Kinghan provides an overview of residential mortgage lending in Ireland in the first six months of 2018. It analyses 17,415 loans originated with six lenders.

I have restructured the Press Release to split the FTBs from the SSBs (Second and subsequent borrowers.)

*First time buyers *


·        The average loan-to-value (LTV) of first-time buyers (FTBs) was 79.6% and the average loan-to-income (LTI) was 3.1, relatively unchanged from H1 2017. FTBs had a larger loan size, property value and income compared to FTBs in H1 2017.

The average interest rate for FTBs was 3.1%, down from 3.4% in H1 2017.

Only seven loans to FTBs exceeded the LTV limit in this period (5% of new lending is allowed per institution).

        23% of the value of total FTB lending exceeded the 3.5 LTI limit between January to June 2018, compared to 24% in H1 2017*.    20% of the value of new FTB lending are permitted to exceed the 3.5 LTI limit per institution in any given year

There were 8,386 FTB loans. 1,455 were over the LTI limit, but only 7 were over the LTV limit.




*Second time buyers *

·        For second and subsequent borrowers (SSBs), the average LTV was 66.9%, a small decrease from H1 2017 (67.8%). The average LTI for SSBs was 2.6 compared to an average LTI of 2.5 in H1 2017. SSBs had a higher property value in H1 2018 and the average borrower age increased from 41 to 42 years old.

·         For SSBs, the average interest rate was also lower in H1 2018 at 3%.

·        Allowances for the LTV limit reached 16% of the aggregate value of new lending for SSBs (20% of new lending is allowed per institution).

9% of the value of total SSB lending exceeded the 3.5 limit in H1 2018.   10% of the value of new SSB lending are permitted to exceed the 3.5 LTI limit per institution in any given year


----------



## Brendan Burgess (2 Oct 2018)

*Second time buyers *

·        For second and subsequent borrowers (SSBs), the average LTV was 66.9%, a small decrease from H1 2017 (67.8%). The average LTI for SSBs was 2.6 compared to an average LTI of 2.5 in H1 2017. SSBs had a higher property value in H1 2018 and the average borrower age increased from 41 to 42 years old.

·         For SSBs, the average interest rate was also lower in H1 2018 at 3%.

·        Allowances for the LTV limit reached 16% of the aggregate value of new lending for SSBs (20% of new lending is allowed per institution).

9% of the value of total SSB lending exceeded the 3.5 limit in H1 2018.   10% of the value of new SSB lending are permitted to exceed the 3.5 LTI limit per institution in any given year


----------



## Brendan Burgess (2 Oct 2018)

I think what all this is telling us is that the Central Bank is happy with the current measures and so they will not be changing them.




Brendan


----------



## Brendan Burgess (2 Oct 2018)

Very little Buy to Let lending

690 loans worth €93mn were issued in the first half of the year. 
Only 14 loans got exceptions.


----------



## Brendan Burgess (2 Oct 2018)

Only 61 borrowers got an exemption from the LTV  regulations due to being in Negative Equity. (The LTI regulations continue to apply.) 

The 1,557 switchers are exempt from the regulations as well.


----------

