The Central Bank of Ireland (CBI) has announced a targeted amendment exempting certain principal home bridging loans from the Loan-to-Income (LTI) limit while retaining the Loan-to-Value (LTV) limit and all other mortgage measures unchanged, recognizing bridging finance as a growing market feature repaid via property sale proceeds rather than income. This matters for compliance professionals as it enables lenders to offer these short-term products (max 18 months) without LTI constraints, but requires reinforced underwriting, consumer protection, and ongoing CBI monitoring to maintain lending standards.
What Changed
- - Exemption from LTI limit: Principal home bridging loans—defined as short-term loans (maximum 18 months) enabling homeowners to buy a new principal home before selling their current property, repaid...
- LTV limit retained: Maximum 90% LTV continues to apply to these loans, alongside the 15% flexibility allowance for first-time/second/subsequent buyer lending.
- No other changes: All remaining mortgage measures, including consumer protection rules and lenders' prudent underwriting obligations, stay intact.
- Monitoring commitment: CBI will track the exemption's operation within its regular mortgage measures assessments for unintended risks.
Suggested Considerations
- Update lending policies: Identify and classify principal home bridging loans (max 18 months, repayment from property sale, no capital repayments required during term) to apply LTI exemption but enforce 90% LTV.
- Enhance underwriting: Conduct individual suitability and affordability assessments beyond macroprudential limits; do not rely solely on exemption.
- Strengthen consumer protections: Fully inform borrowers of risks (e.g., sale delays, interest costs); ensure products suit circumstances per consumer protection rules.
- Internal monitoring and reporting: Track bridging loan volumes within flexibility allowances; prepare for CBI inquiries as part of ongoing assessments.
- Staff training and systems updates: Revise origination, disclosure, and compliance systems promptly to operationalize changes.
Key Dates
Announcement and effective date; CBI press release details the amendment, with immediate application implied for qualifying bridging loans (no explicit phase-in mentioned)
Compliance Impact
Urgency: High – Effective immediately on announcement (08 April 2026), this enables new lending opportunities in a evolving market but demands swift policy tweaks, training, and risk controls to avoid consumer protection breaches or excessive risk-taking, with CBI monitoring for emerging issues. Non-compliance risks supervisory scrutiny, as measures reinforce macroprudential goals amid housing market pressures.