Permanent TSB and KBC Bank Ireland have closed the option for borrowers of getting an exemption from Central Bank mortgage rules.

Permanent TSB said its decision "does not mean that we will be closed for first-time buyer LTI (loan-to-income) exceptions for the remainder of the year".

Under Central Bank lending rules, people can borrow 3.5 times their annual income to buy a home, however, in any one calendar year 20% of mortgages that lenders give out to first-time buyers can be above this cap (up to 4.5 times an applicant's income).

In a statement PTSB said: "Because the 20% exception limit is for the year as a whole and because some exceptions granted now may not be drawn down for a number of months, we manage the exception pipeline on an ongoing basis and from time to time we close LTI exceptions for a period of time to ensure that we stay within the regulatory limits."

It added that first-time buyer customers who have already been granted an exemption from the lending rules and "who have an approval in principle retain that exception for the duration of their approval".

KBC Bank Ireland said: "Like all mortgage lenders, KBC is required to follow and continuously monitor the guidelines set by the Central Bank of Ireland on Macro Prudential lending limits for residential mortgages."

Trevor Grant, Chairperson of the Association of Irish Mortgage Advisors, said that while today's move by Permanent TSB and KBC Bank Ireland might seem like a blow to first time buyers, there are still a number of lenders offering exemptions.

"This cycle will correct itself later in the year," he added.

"It does, however, highlight the importance of the mortgage application process itself and of ensuring that all the boxes are ticked when it comes to approaching a lender for approval," he said.

He said that when trying to secure a mortgage, it is imperative that applicants know exactly what lenders are looking for and how to present their particular case to them.