The Central Bank has made a dramatic change to its mortgage lending rules for first-time buyers.
However, there are also fears that the loosening of the lending limits will lead to even higher property price rises.
First-time buyers will now be able to borrow with a deposit of 10pc, if they meet other lending criteria.
Up to now, new borrowers could have been approved for a mortgage with a deposit of 10pc for borrowings up to €220,000 and a 20pc deposit for all amounts over that. The changes will take effect from 1st January 2017.
At the moment, a first-time buyer purchasing a home for €300,000 needs a deposit of €38,000.
From next year, the new buyer should qualify for mortgage approval with a deposit of €30,000.
This will give the buyer an extra €8,000.
And if the buyer qualifies for the Government’s Help-to-Buy scheme for new homes, they will get a tax rebate of €15,000.
This means they will be able to buy with an effective deposit of 95pc of the property’s value.