Homeowners looking to 'rightsize' to smaller properties are expected to benefit from the updated mortgage rules set to come into effect in the coming weeks.
Tánaiste and Minister for Finance Simon Harris has written to Central Bank Governor Gabriel Makhlouf to support the bank's plans to reform mortgage lending rules.
Under the changes, lenders will be given greater flexibility to provide so-called bridging finance, which is availed of by people looking to purchase a new property prior to the sale of their existing home.
According to the expected changes by the Central Bank, certain types of bridging loans will be exempt from the loan-to-income limit.
It currently restricts the amount of money people can borrow to a maximum of four times gross income for first-time buyers and three and a half times gross income for second/subsequent buyers.
The changes are expected to benefit people who may be retired, on lower incomes and who wish to purchase a smaller, more suitable property.
In a statement, the Tánaiste confirmed that he wrote this week to the Governor to support the initiative.
"This is an important measure in our efforts to increase housing choice for older people and I commend the Central Bank and Governor Makhlouf for adopting such a sensible, pragmatic approach," Mr Harris said.
"Delivery of more suitable homes for older people and supporting people who wish to voluntarily rightsize is an important element of Government’s overall approach to housing and this practical measure is very welcome," he added.
While bridging products are already available in the market, this change is expected to remove any potential impediments to this type of lending.
