A mortgage support scheme for first-time buyers in Ireland has run into financial difficulties after one year, according to reports
A mortgage support scheme for first-time buyers in Ireland has run into financial difficulties after only 12 months, according to reports.
Rebuilding Ireland was set up last year by the country’s government to help first-time buyers afford homes and is open to those who have been turned down by at least two banks, due to low earnings.
Customers can borrow up to 90 per cent of the price of their homes, although the government website states: “The maximum loan amount is determined by where the property is located.”
And it can be used on new, second-hand or self build properties.
To qualify for Rebuilding Ireland, applicants must earn under €50,000 individually or under €75,000 combined for couples. With interest rates as low as 2 per cent fixed for the duration of the mortgage, the deal is more generous than those offered by commercial lenders.
Applicants cannot buy properties worth more than €320,000 in some areas, including Dublin and Cork, while the limit is €250,000 in other parts of the country.
As of the end of January, Rebuilding Ireland had received 4,000 mortgage applications, and 1,660 had been approved, with the government arguing it had been a victim of its own success.
Following the property bubble and recession that blighted the country in 2008, Ireland’s economy has recovered strongly and at the end of the last financial year, its headline growth of 7.8 per cent was comfortably the highest in Europe.
A spokesperson for Eoghan Murphy, Ireland’s minister for housing, planning and local government, said talks were under way with government finance departments to try to secure further funding for the scheme.
It was estimated that the drawdown of loans under the scheme would be approximately €200m over three years, they said.
(The scheme) has proven to be more successful than initially anticipated, as a result of which the scheme would require a further tranche of funds.
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