Research from the Central Bank into its mortgage lending rules has found that although the measures may dampen economic activity in the short term, they bring benefits over the longer term.
According to the study, the restrictions will lead to a reduction in household debt, thereby reducing risk.
The rules, which were implemented in February 2015, set the ceiling at 90% for mortgages up to €220,000, but at 80% for the rest of the mortgage above €220,000.
However, last November the Central Bank amended the rules, removing the €220,000 cap on mortgage lending for first-time buyers who have a deposit of 10%.
At that time, Central Bank Governor Philip Lane said he decided to alter the mortgage rules in response to rising house prices and higher incomes.
Today's findings are published in an economic letter, 'The macroeconomic effects of the regulatory LTV and LTI ratios in the Central Bank of Ireland's DSGE model', which was composed by two of the Bank's economists - Matija Lozej and Ansgar Rannenberg.
The research adds that as the rules lead to households becoming less indebted, the default on bank loans will fall.
