Mortgage rule change to ease downsizing for older homeowners
Central Bank move removes income cap on bridging finance to support housing mobility
11 April 2026 | đ§Â editor@ipropertyradio.com
The TĂĄnaiste and Minister for Finance, Simon Harris TD, has welcomed a Central Bank decision to amend mortgage lending rules aimed at improving access to bridging finance, particularly for older homeowners seeking to downsize.
The change removes the loan-to-income (LTI) limit for borrowers using bridging finance to purchase a new principal residence before selling their existing home. Bridging finance is a short-term lending product typically used to facilitate such transactions.
The adjustment is expected to benefit older households with lower incomes, including retirees, who may previously have faced constraints under standard mortgage rules despite holding significant housing equity.
Welcoming the move, the TĂĄnaiste said it represents âan important measure in our efforts to increase housing choice for older peopleâ and aligns with Government commitments under the âDelivering Homes, Building Communities 2025â2030â plan to support voluntary downsizing, or ârightsizingâ.
He added that the change reflects âa sensible, pragmatic approachâ and can enable greater availability of bridging finance while maintaining protections for both consumers and the financial system.
Under existing Central Bank macroprudential rules, mortgage lending is subject to both loan-to-value (LTV) and LTI limits. For principal dwelling homes, LTV is capped at 90%, while LTI limits are set at four times income for first-time buyers and 3.5 times for subsequent buyers. These restrictions had also applied to bridging finance.
The revised rules will exempt qualifying bridging loans from the LTI cap, provided the loan term does not exceed 18 months and is repaid through the sale of the borrowerâs original home or at the end of the term.
The Central Bank has confirmed that the change will be implemented through updated regulations under Section 48 of the Central Bank (Supervision and Enforcement) Act 2013. The Minister for Finance has formally supported the decision following consultation.
While the rule change provides greater flexibility, lenders will retain discretion over whether to offer bridging finance and how individual applications are assessed.
The move is intended to improve housing mobility by enabling older homeowners to transition more easily to smaller or more suitable accommodation, potentially freeing up larger homes within the housing market.
