New 20% deposit rule for new mortgages is delayed – – Our News, Your Views

New 20% deposit rule for new mortgages is delayed

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The new rule, which would see new mortgage applicants having to put down a 20% deposit before being considered for approval, will now not come into effect on January 1 2015 as originally planned.

The 20% rule has proved controversial, as many fear it will effectively prevent most people from even applying for a mortgage in the first place.

The Oireachtas Finance Committee meets this morning to discuss mortgage insurance schemes, and how they would best be implemented in Ireland.

In theory, these schemes would guarantee a portion of the mortgage and would enable buyers to borrow over 80% of the property value. The cost of the insurance would be borne by the borrower.

If implemented properly, the mortgage insurance would theoretically work to the borrower’s advantage, in the sense that if the property is sold for less than the loan’s amount, the first 10% would be covered by the deposit and another 10% by the insurance scheme.

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