Environment Minister Alan Kelly has said a Central Bank proposal to limit mortgages to 80% of a property's value will have to be changed.
Mr Kelly said the plan, which will mean buyers will need a deposit of 20% upfront is too high.
His comments come amid reports the Government is considering a new insurance scheme to get around the Central Bank rules and make it easier for first time buyers to get a mortgage.
The details are still being finalised but its likely to be based on similar schemes in Canada, Finland and the UK.
Mr Kelly said: "I think the 20% threshold is too way too high and it will have to be addressed."