Government plans mortgage insurance scheme for first time buyers

First time buyers may soon find it easier to get a mortgage, as Government plans for a new scheme to insure part of home loans moves forward.

It is reported the Government is planning to introduce a new scheme, whereby a portion of the mortgages to first-time buyers of new houses will be guaranteed by the State, in order to allow banks give out more loans.

Similar schemes are already in place in Canada, Australia and Britain.

Sharing of the risk will be undertaken through a government mortgage insurance scheme.

The plan, it is believed, will involve the State taking responsibility for 10–15% of a loan's value, the deposit covering approximately 5%, and the bank being liable for the remainder.

The bank will assess a candidate's suitability for a loan as normal, but the scheme may make 95% mortgages more widely available.

Meanwhile, Fianna Fáil has criticised the Government for not implementing any of the 36 recommendations in Forfás' construction strategy, which it published last July.

With 80,000 construction workers on the live register, the party's Justice spokesperson, Dara Calleary said the coalition should be doing more.

"We also have a shortage, particularly in Dublin, of appropriate office accommodation … the IDA have highlighted that as a major issue, [and] the Government haven't done anything on that," he said.

"We have a serious opportunity around the country in refitting all of our construction stock – homes and offices – with new energy-friendly refitting: there's huge employment potential there."

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