New Bridging Loan Rules 2026
Secure Irish bridging finance without LTI limits under 2026 Central Bank rules.
2026 Regulatory changes at a glance
On 8 April 2026, the Central Bank of Ireland changed the rules for a specific type of bridging loan: one used to buy your next home before you’ve sold your current one. Under the old rules, lenders had to check this loan against your salary, just like a normal mortgage. Now, that salary check, the Loan-to-Income (LTI) limit no longer applies. The Central Bank’s reasoning is simple: you pay this loan back with the money from your house sale, not your monthly wage, so testing it against your salary didn’t make much sense.
This means homeowners trading down, or trying to avoid a broken property chain, can now be assessed on the equity built up in their current home, rather than a multiple of their income. The other safety rules haven’t gone anywhere: lenders still apply strict Loan-to-Value (LTV) limits, and the loan still has to be repaid within 18 months.
Key points
| No more LTI limit: The usual salary multiples (3.5x income for second and subsequent buyers or 4x for first-time buyers) don't apply to principal home bridging loans anymore. | |
| LTV limits stay: The Central Bank's Loan-to-Value rules are unchanged, and lenders can still set their own, often tighter, limits to protect against house prices falling. | |
| 18 months, maximum: These loans are strictly short-term. Once your existing property sells, the loan must be paid off in full. | |
| Only for your main home: This change only applies to your Principal Private Residence (PPR). It doesn't cover buy-to-let or investment properties. | |
| No monthly capital repayments: You won't be asked to pay off the loan amount in monthly instalments, it's repaid in one go when |
2026 Bridging Loans New Central Bank Rules – Go To:
Central Bank policy amendment (April 2026)
Before this change, a bridging loan to buy a home was assessed in the same way as a standard mortgage, including the same 3.5x or 4x salary limit used for long-term lending. For a lot of Irish homeowners, especially those further along in their careers, that didn’t add up. They might have plenty of equity tied up in the family home, but a lower or fixed income that simply couldn’t pass an affordability test built for two properties at once.
| Parameter | Bridging loan rules (pre-2026) | New rules (2026 Onward) |
|---|---|---|
| Loan-to-income (LTI) | Capped at 3.5x gross salary (SSB) | No salary multiple applied |
| Loan-to-value (LTV) | Standard macroprudential LTV caps | Max 70% LTV, strictly enforced against equity |
| Property scope | Treated under general mortgage rules | Limited to Principal Private Residence (PPR) |
| Maximum term | Varied / not standardised for short-term lending | Standard maximum of 18 months |
| Repayment Source | Tested against regular monthly income | Sale proceeds, paid on property closing |
The Central Bank’s April 2026 announcement explains the thinking behind the change. It recognises that a principal home bridging loan is really an asset-backed tool, not a debt you pay off with your wages, you exit the loan by selling your house, not through your salary. Deputy Governor Vasileios Madouros of the Central Bank of Ireland, called it a proportionate response to how the Irish mortgage market has changed, designed to help people move home without loosening lending standards anywhere else.
The homeowners who benefit most are Second and Subsequent Buyers (SSBs) and older people trading down, groups who often have plenty of equity in their home, but who might have struggled to pass a standard income test for a short-term bridging loan in the past.
Beneficiaries at a glance:
- Second and subsequent buyers (SSBs)
- Older homeowners trading down
- Anyone with strong home equity who may have failed an income-based stress test before
Qualifying criteria for the principal home LTI exemption
To use the 2026 exemption, your bridging loan needs to tick four boxes set by the Central Bank:
- It’s for your main home: The property you’re buying has to be intended as your Principal Private Residence, not a second home, holiday home, or investment property.
- 18 months, maximum: The loan must have a fixed legal end date, no more than 18 months away.
- No forced repayments: The loan agreement can’t require you to make regular monthly capital repayments during its term.
- Paid off by your sale: The loan must be fully repaid using the proceeds from selling your original home.
Many Irish mortgage lenders apply a minimum salary rule-of-thumb:
- Single applicants: baseline minimum gross income of €40,000 to €50,000.
- Joint applicants: combined minimum gross income of €70,000 to €80,000.
Dual-property security & LTV calculation
A principal home bridging loan is usually secured against both properties in the move, your current home and the one you’re buying. This is called cross-collateralisation. The lender registers a legal charge on each property: normally a first charge on the home you’re buying, and a first or second charge on your current home until it’s sold.
Working out how much you can borrow comes down to three simple steps:
Step 1 – Add up both property values: Take the independently verified market value of your current home and the home you’re buying and add them together.
Step 2 – Subtract what you still owe: Take away any mortgage balance left on your current home, since this must be cleared using the bridging loan.
Step 3 – Work out what’s left to borrow: What’s left is the equity available for your deposit and costs, if your total borrowing across both properties stays within your lender’s LTV limit.
The Central Bank has pointed out that, in real life, LTV levels on bridging loans usually sit well below the general mortgage limit. That’s because lenders build in extra room to protect against house prices falling.
Repayment Structures: Interest-Only vs. Accumulated Interest
There are two common ways to handle the interest on a principal home bridging loan in Ireland. Which one suits you best comes down to your income while you’re mid-move:
Accumulated Interest (12 months, maximum):
The interest builds up and is paid off in one lump sum when your property sells, you make no monthly payments in the meantime. This can suit retired downsizers, or anyone who wants no monthly outgoings while they’re moving house.
Interest-Only (18 months, maximum):
You pay the interest each month, and the loan amount itself is paid off when you sell. This can suit working movers who have the monthly income to cover interest payments but want the extra time, up to 18 months to sell.
| As neither of the above carry exit fees you can clear the facility in full prior to maturity. |
Legal conveyancing workflow & solicitor undertakings
Buying before you sell relies heavily on your solicitor, working within rules set by the Law Society of Ireland. Because two properties are moving at the same time, a purchase and a sale, plus registering and later releasing legal charges, your solicitor’s workload, and their fees, reflect two transactions rather than one.
The key document here is the Irrevocable Solicitor Undertaking. This is a formal promise from your solicitor to the bridging lender, confirming that the money from your home sale will go straight to the lender to pay off the bridge, before any leftover equity comes to you.
Here’s how it typically plays out:
- Contracts on both sides: You sign contracts to buy your new home, while contracts to sell your current home are being prepared at the same time.
- The undertaking is issued: Your solicitor sends the formal Irrevocable Solicitor Undertaking to the bridging lender.
- Funds released, purchase completed: The bridging loan is drawn down so you can complete on your new home.
Sale closes, loan is repaid: Once your old home sale goes through, the bridge is paid off in full and the charge on your former home is removed.
Frequently Asked Questions
What legal charge does a bridging lender put on my existing Irish home?
Bridging lenders secure the loan by registering a First or Second Legal Charge against your current property's Folio, through the Property Registration Authority (PRA), as well as a charge on the new property. Once your sale completes and the loan is repaid, your solicitor files a Release of Charge (Discharge) to clear the title.
Can I still get the 2026 bridging LTI exemption if my current home is in probate?
Yes, in principle, bridging finance can work alongside a probate sale. But lenders will usually want to see the Grant of Probate fully issued, or very close to it, before releasing funds. This makes sure there's a clear legal path to selling the inherited property within the 18-month term.
Will a bridging loan affect my tax position on Principal Private Residence (PPR) relief?
Under Irish Revenue rules, owning two homes for a short time while you move usually doesn't affect the Capital Gains Tax exemption on your main home, as long as the original property really was your principal residence, and you sell it within the timeframe Revenue allows. Tax rules can depend on your exact situation, so it's worth checking with a tax advisor or accountant alongside your mortgage broker.
What happens if house prices fall during my 18-month sales window?
This is exactly what the Central Bank's LTV limit, and any extra buffer your lender applies on top, is there for. If prices soften, the equity cushion built into the LTV cap is designed to absorb the change, so your sale proceeds are still enough to clear the loan. Lenders expect a realistic asking price from day one, and your broker's job is to help you build a solid exit plan around that.
How will the 2026 rule change affect my conveyancing legal fees?
Because a principal home bridging loan involves two properties moving at once, a purchase and a sale, plus registering and later releasing legal charges, your solicitor will usually charge for handling two transactions. This also covers preparing the Irrevocable Solicitor Undertaking for the lender, so it's worth factoring this extra work into your overall budget.
Interested to find out more?
The 2026 exemption doesn’t remove the need for a solid plan, it removes an income test that was never really designed for asset-backed lending. What we’re focused on with every trade-down client is the exit: a realistic valuation, a sale strategy that fits inside the 18-month window, and an LTV buffer that protects them if the market moves. That’s what turns a bridging loan from a risk into a genuinely useful tool for downsizers and movers.
“New Bridging Loan Rules 2026,” the information is current as of September 2026; loan rules, caps and eligibility criteria are subject to change.