Who are lending to first-time home buyers
Belgium owned KBC Bank has pulled the shutters down on mortgage lending to new buyers, according to a number of brokers.
Others lenders such as Permanent TSB, Ulster Bank, National Irish Bank and EBS are reluctant to issue mortgages to young borrowers.
A number of banks have disappeared from the market, including Irish Nationwide and Bank of Scotland/Halifax.
This means that just AIB and Bank of Ireland are now willing to fund young people buying their first home.
The latest squeeze on lending came after KBC Bank admitted it had further tightened its lending criteria.
It requires anyone getting a mortgage to have a deposit of at least 20pc of the value of the property — effectively ruling out most first-time buyers from applying. It will only issue a mortgage to those who will have finished paying it off by the time they are 65.
Broker Wayne Sheridan of The Mortgage Shop said: “KBC seems to have closed its doors to mortgage lending.”
He said he was handling a number of applications where the potential borrowers had a good deposit, job security and a good record of paying rent, but all of them had been turned down by KBC. Up to recently they would have had their applications accepted.
Karl Deeter of Irish Mortgage Brokers said the new curbs left AIB and Bank of Ireland as the only ones prepared to back first-time buyers.
Recent figures from the Irish Banking Federation show first-timers make up 49pc of all mortgage loans issued, followed by those moving home.
Smaller: KBC Bank denied yesterday it had eased off on lending because home-loan arrears had risen dramatically — arrears of 90 days or more rose to 12.6pc at the end of 2011.
KBC director of retail banking, Dara Deering, admitted it was imposing more restrictive criteria but insisted it was still open for business.
She said the requirement that anyone getting a mortgage had to have a 20pc deposit tended to exclude most first-time buyers, as they typically have smaller deposits. Ms Deering said the bank was no longer offering 35-year mortgages, with 30 years now the maximum.
The bank’s view was that the property market had yet to stabilise and until it did KBC would not be altering its 20pc requirement.
Up to a few months ago, the bank required a 10pc deposit. Its lending rate is 4.25pc.
AIB will accept borrowers who have 8pc deposits, and has some lending rates as low as 2.84pc, according to Frank Conway of Irish Mortgage Corporation.
Bank of Ireland and its subsidiary ICS require a 10pc deposit. The bank said recently that although its overall lending was low, it was showing “support and commitment to the Irish mortgage market”.
Bank of Ireland accounts for just over 50pc of all new mortgage lending by value, it said.
Mr Conway said Permanent TSB requires a deposit of 20pc and it claims to be lending, but “we have yet to see evidence of this”.
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