Taking stock of the mortgage measures over the past decade - Madouros

• The introduction of the mortgage measures a decade ago has been amongst the most important public policy interventions by the Central Bank, and has played a significant role in strengthening the resilience of borrowers, lenders and the broader economy.
• The Central Bank has been responsive to the evolving context over the past decade, adjusting the design and calibration of the measures to balance benefits and costs.
• The environment in which the measures operate is likely to become more challenging over the next decade, but that is also when their benefits are likely to be higher.

Deputy Governor of the Central Bank of Ireland Vasileios Madouros delivered the Richard Cantillon lecture at the Dublin Economics Workshop today 19 September 2025.

Speaking ahead of the lecture, Deputy Governor Madouros said: “It has now been a decade since the Central Bank introduced the mortgage measures. These have been amongst the most important public policy interventions by the Central Bank, both to avoid damage to the economy as a whole and to protect consumers.

“I am very conscious that the measures affect people very directly. Buying a house is the most important financial decision that most people will make in their lives. And mortgages are the largest form of borrowing by households. So the measures matter for individuals, and they matter for the economy as a whole.

“I am also very conscious that the benefits of the measures are not directly observable by most people.  Indeed, they stem from the absence of things, like unsustainable booms and busts, over-indebtedness or widespread financial distress. The benefits of the measures are also long-term: they may not be immediately obvious today, but they can become more apparent when shocks hit.”

“What we do know, ten years on, is that the mortgage measures have played an important role in strengthening the resilience of borrowers, lenders and the broader economy. It is important not to lose sight of that, especially as we navigate a more shock-prone world.”

Weighing benefits and costs

Discussing the Central Bank’s approach to weighing up the benefits and costs of the measures, Deputy Governor Madouros said:

“As policymakers, we do not aim for resilience at any cost. That would not serve society well. Like all policy interventions, the mortgage measures entail both benefits and costs from the perspective of the economy as a whole. Our job is to balance these.

“Indeed, over the past decade, the mortgage measures have not remained static. We have adjusted them, based on evidence, to balance their benefits and costs, from the perspective of the public good. And we continue to deepen our understanding of their impact, learning from our own experience and the experience of other countries.”

Looking ahead

Commenting on the future outlook, Deputy Governor Madouros said: “Looking ahead to the next decade, the environment in which the measures operate may well be more challenging than the one that prevailed over the past decade. Memories of the financial crisis are fading, mortgage market activity is likely to increase and house prices are already elevated relative to incomes. This combination of factors has the potential to create the conditions for rising indebtedness, especially if lending standards in the mortgage market were to weaken.

“It is precisely in such an environment that the value of the mortgage measures is likely to be higher. Our focus at the Central Bank will be to ensure that the measures continue doing their job into the future, so that dynamics in the mortgage market – which ultimately underpins broader housing activity – remain sustainable over the long term.”

ENDS

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