Borrower-Based Measures
On 29 March 2019, the Central Bank of Malta published Directive No. 16 on the Regulation on Borrower-Based Measures. The objective of these binding measures is to strengthen the resilience of lenders and borrowers against the potential build-up of vulnerabilities stemming from the real estate market. The Directive came into force on 15 July 2019. The Measures were introduced in collaboration with the Malta Financial Services Authority (MFSA) following a recommendation by the Joint Financial Stability Board (JFSB).
A 
public consultation was launched on 1 October 2018 and a Feedback Statement was published on 29 March 2019. The Feedback Statement incorporates feedback from respondents and the Authorities following the public consultation.
As per news release issued on 29 November 2021, the Bank published a revised version of the Directive reflecting changes emanating to transitional provisions that came into force as well as feedback received by the banks. The changes also reflect some drafting refinements and clarifications.
During 2026, the Bank continued to refine the Directive. To this end, a four-week public consultation was launched on 23 January 2026 outlining the main amendments to the Directive, in particular the introduction of a stressed Debt Service Coverage Ratio (DSCR-O) of 1.3x for legal persons which would replace the existing DSTI-O limit. Additional changes also relate to some drafting refinements to reflect the feedback received from respondents during the public consultation.
On 26 March 2026, the Bank published a feedback statement incorporating feedback by the Bank to the comments received during the consultation. The amended Directive 16 came into effect on this same date.
The measures set limits on the loan-to-value at origination (LTV-O), debt-service-to-income at origination (DSTI-O), debt service coverage ratio at origination (DSCR-O) and maturity, as follows:
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LTV-O
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DSTI-O
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DSCR-O
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Maturity
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Category I Borrowers
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90% LTV-O cap with a 'Speed Limit' of 10% on the volume of loans
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A stressed DSTI-O of 40% for loans with a shock to interest rates of 150 bps
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N/A
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A maturity term of 40 years or the official retirement age - whichever occurs first:
Born on/before 1951: 61 years
1952-1955: 62 years
1956-1958: 63 years
1959-1961: 64 years
Born after 1961: 65 years
A loan may exceptionally mature beyond a borrower's retirement age subject to the conditions outlined in paragraph 19.
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Category II Borrowers
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75% LTV-O cap with a 'Speed Limit' of 20% on the volume of loans
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A stressed DSTI-O of 40% with a shock to interest rates of 150 bps
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A stressed DSCR-O limit of 1.3x with a shock to interest rates of 150 bps, applicable to legal persons
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A maturity term of 25 years or the official retirement age - whichever occurs first:
Born on/before 1951: 61 years
1952-1955: 62 years
1956-1958: 63 years
1959-1961: 64 years
Born after 1961: 65 years
A loan may exceptionally mature beyond a borrower's retirement age subject to the conditions outlined in paragraph 19.
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The Directive may be amended subject to the prevailing developments in market conditions.