A new first time buyers' mortgage could herald the launch of many more deals to help pull young people on to the property ladder, it was claimed today.
Bank of Ireland's 'Breakthrough Mortgage' which is currently the only one of its type on the market, offers investors loans of up to 97per cent of the house price and lending terms of over 35 years.
Housing Minister Mr Noel Ahern said it was only fair and right that financiers be more open to competition and consumer choice.
"My department is in discussions with several other leading commercial lending institutions and I expect there will be further similar announcements in the near future," he said.
Borrowers will also only have to pay 3 per cent deposit on the home under the new deal, rather than the traditional 8 per cent.
The Taoiseach, Mr Ahern, who launched the Bank of Ireland product, said it was important for finance houses to recognise the value of first time buyers. "It has long been a Government aim to ensure such finance is available to all potential purchasers," the Taoiseach said.
"Improving access to affordable housing for first time buyers is a very important objective of Government housing policy."
Mr Ahern also reaffirmed the Government's commitment to affordable housing schemes.
A total of 80,000 homes have been built since the scheme began and it is hoped more than 11,000 affordable homes will be built from various schemes over the next three years.
But up until now funding for affordable schemes was exclusively provided through the Housing Finance Agency and local authorities.
Buyers now have the option of hitting the banks for loans of more than €165,000 .
Sole borrowers can borrow up to four and five times their salary and joint borrowers can borrow four and a half times their income.
PA