I've broken this out into a separate thread so as not to distract from @pacmon moneymakeover so below are are some posts for context. I fully understand the reason for these limits but I don't believe a blanket 3.5x income is the right way to do it. It should be on a sliding scale that factors in age, dependents and pension provision
Our mortgage is 3.15 times my gross salary, so it's bit under the new Central Bank lending loan-to-income limit.
IMO, this is a failure of the CB rules. You might have been within the limits but in your mid-40's with a single income, 5 dependents and no pensions, the bank should never have allowed you to borrow that amount as it is now putting you under pressure
I fully agree. These rules are the same for a 25YO as a 45YO.
The younger person has of course longer to pay the loan off and is likely to see income increase over time. For the older person it's the opposite, earnings peak on average at about age 50.
I think that these rules are substituting for sensible risk assessment both by banks and borrowers. This was never what they were designed for. @pacmon has a lot of debt for his age, income, and asset position. I think it could turn out well once spouse returns to work and large pension contributions start being made, but it's a lot of risk.
The Central Bank rules are designed primarily to protect the banks from themselves.
The OP will be able to repay this loan by retirement.
They made a choice to have 4 kids and they can afford them although their retirement will not be as comfortable as it would otherwise be. But that is a perfectly valid choice to make.