Noonan hopeful of mortgage deposit insurance scheme for first-time buyers

Wednesday 14 May 2014 00.02
The State would arrange insurance cover for part of the deposit currently sought by banks from first-time buyers
The State would arrange insurance cover for part of the deposit currently sought by banks from first-time buyers

Minister for Finance Michael Noonan has said a State-backed insurance scheme for mortgage deposits should be ready for inclusion in this autumn's finance bill.

The Government has been looking at using mortgage deposit insurance as a mechanism to kick-start house building, particularly in Dublin.

Under the scheme, the State would arrange insurance cover for part of the deposit currently sought by banks from first-time buyers.

This would allow the banks to reduce the size of deposit they require from borrowers, and still comply with new capital rules and loan to deposit ratios.

He said the details of such a scheme have yet to be worked out, but he believes it is a good idea, and it should be finalised in time for inclusion in the next finance bill.

Mr Noonan said the scheme would be restricted to first-time buyers of new build property only, it would cover only normal three and four-bed semi-detached homes, and it would be time limited.

The Taoiseach and the Tánaiste are expected to include an assessment of implementing a mortgage deposit insurance scheme as part of a wider package of measures to stimulate construction industry activity, which is due to be launched tomorrow.