The Central Bank of Ireland has announced a targeted update to its mortgage lending rules.
This change is specifically designed to help people who are "rightsizing" (often older homeowners downsizing to a smaller property) by making it easier to secure bridging finance.
The Key Change: LTI Exemption
Previously, bridging loans—short-term loans used to buy a new house before you have sold your current one—were subject to the standard Loan-to-Income (LTI) limits. This often blocked homeowners with lower regular incomes (such as retirees) from moving, even if they had massive equity in their current home.
The New Rule: Bridging loans for a primary residence are now exempt from LTI limits.
The Condition: The loan must be short-term (maximum 18 months) and must be repaid using the proceeds from the sale of the original home.
Remaining Safeguards: Loan-to-Value (LTV) limits still apply, meaning you still need a certain level of equity/deposit, and banks must still conduct their own affordability assessments.
Why is this helpful for switching/moving?
Moving home in a "chain" can be a logistical nightmare. If you find your dream home but haven't sold your own yet, you usually need a bridging loan to "bridge" the gap.
FeatureOld RuleNew Rule (2026)Borrowing LimitCapped at 3.5x income (for second-time buyers).No income cap for the bridging portion.Primary FocusMonthly salary/pension.Equity in your current home.DurationVaried by bank.Capped at 18 months.
Impact on "Rightsizers"
This move is particularly aimed at older homeowners. For example, a retired couple might have a €500,000 home and want to buy a smaller €400,000 apartment. Even though they have the money "locked" in their house, their pension income might not have been high enough to qualify for a temporary €400,000 bridging loan under the old 3.5x income rules. Now, that income barrier is removed.
What about regular mortgage switching?
If you are just switching your current mortgage to a different bank for a better rate (without moving house), the Central Bank rules already allowed for flexibility. Straightforward "switcher" mortgages remain exempt from the LTI and LTV limits, provided you aren't increasing the loan amount.
Note: While the Central Bank has loosened the rules, it is still up to individual commercial banks (like AIB, Bank of Ireland, PTSB, etc.) to decide if they want to offer these bridging products. Check with your lender or a broker to see which banks have updated their internal policies to match these new regulations.