Mortgage interest relief measures slammed
Mortgage rules remain too stringent, warn industry representatives, despite latest Central Bank figures showing the lowest level of quarterly mortgage arrears in almost a decade.
According to the Central Bank, some 42,065 mortgages were in arrears for more than 90 days as of the end of December.
That represented a fall from 5.9% to 5.7% of total residential mortgages over the last two quarters of last year and the lowest arrears levels for nine years.
Representative group Brokers Ireland welcomed the improvement but said “overzealous” mortgage rules mean anyone in arrears or in a restructure prior to this month cannot avail of the payment freeze announced by lenders this week as a Covid-19 protection measure.
“These rules, in our view, are overzealous,” said Rachel McGovern, director of financial services at Brokers Ireland.
“Many in arrears would normally be able to get back on track but like others will have a particularly difficult time in the current pandemic, which will pass.
"Effectively, those in most need are being excluded.
“Just this week we saw something of a parallel with lenders, in response to the Covid-19 pandemic, offering a three-month mortgage break.
"But it would appear there is no break from interest, it will simply be added on at the end, meaning mortgage holders who do avail of it will pay more interest in the longer term.”
Ms McGovern added: “This is not an attractive proposition and we would advise anyone who is able to pay their mortgage in this crisis to try and do so to avoid having to pay more down the line.”
Sinn Féin finance spokesman Pearse Doherty slammed the relief measures as “outrageous”.
“Despite repeated promises from banks of a payment holiday for customers at a time of national emergency caused by the Covid-19 pandemic, they have refused to ensure that mortgage interest will not accrue for those that can’t make mortgage payments because of financial difficulties,” he said.
“This means, for example, that people with a €200,000 mortgage will pay close to €2,000 more over the lifetime of their mortgage.
"This is how banks are intending to profit out of this crisis and this is, quite frankly, outrageous.”
