Politics

Fianna Fáil says mortgage deposit for house should be 10%

Michael McGrath: 20% would ‘put home ownership beyond vast number of individuals’

Cork South-Central TD Michael McGrath has said: “It is our view that the capacity of a person to repay a mortgage is a far more meaningful measure of the affordability of a mortgage than setting a 20 per cent minimum deposit level.” Photograph: Dominic Lipinski/PA Wire
Cork South-Central TD Michael McGrath has said: “It is our view that the capacity of a person to repay a mortgage is a far more meaningful measure of the affordability of a mortgage than setting a 20 per cent minimum deposit level.” Photograph: Dominic Lipinski/PA Wire
Fiach Kelly
Tue Dec 09 2014 - 18:33

A minimum deposit of between 10 and 12 per cent should be enough for anyone looking to buy a home, according to Fianna Fáil's submission on new Central Bank mortgages rules.

The Central Bank proposed setting the minimum deposit at 20 per cent and the consultation period on its plans closed earlier this week.

Michael McGrath, Fianna Fáil’s finance spokesman, said the proposed 20 per cent rule “is excessive and will put home ownership beyond a vast number of individuals and couples into the future”.

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Mr McGrath said the rules will make it particularly hard for those renting to save a sufficient deposit.

“It is our view that the capacity of a person to repay a mortgage is a far more meaningful measure of the affordability of a mortgage than setting a 20 per cent minimum deposit level,” the Cork South-Central TD said.

“Setting such a high deposit threshold serves to provide a buffer for the banks in the event of a fall in property prices.

“If the Central Bank decides to press ahead with its plans, we believe the minimum deposit required should be phased in over an 18-month period so as not to create a sudden dislocation in the market.”