Mortgage lenders should take into account the age of borrowers, the reason they are borrowing the money and their attitudes to fixed and variable interest rates when selling mortgage products, the Irish Financial Services Regulatory Authority has told lenders.

The financial regulator has written to all lenders to say that, as well as checking that borrowers can afford to repay their loans, a range of other factors related to their individual financial situations should be considered when judging the suitability of a particular mortgage product.

The regulator added that testing borrowers' ability to afford their mortgages in the future, particularly in cases where a discount mortgage interest rate will rise after a limited period, should be an important consideration when assessing the loan's suitability.

Mortgage lenders already use a variety of criteria in the underwriting process for loans, but the regulator's letter makes clear that the written suitability statements, or "reason why" letters, issued to customers should state why the particular product is the most suitable for the consumer based on their individual circumstances.

In its letter, the financial regulator also called for "effective management controls" on front-line sales positions and highlighted the need to fully disclose the conditions under which people selling mortgages offer financial advice.

The regulator's letter follows a survey of lenders conducted in April and May.

Overall, it said it was happy with how financial institutions were implementing changes to their sales processes in order to comply with its consumer protection code, which came into effect in July.