Ireland\\\'s Banks and Non-Bank Lenders Respond to Calls for Mortgage Support

In response to Finance Minister Michael McGrath's request for assistance to mortgage-holders affected by recent interest rate increases by the European Central Bank, Ireland's banking sector, under the Banking and Payments Federation Ireland (BPFI), has implemented a new set of eligibility criteria. These measures aim to facilitate customers of credit servicing firms in switching their mortgage to another provider. Stay informed on the steps taken by Irish banks and non-bank lenders to support those facing difficulties in the midst of interest rate hikes.

Ireland Banks and non-bank lenders have introduced a new set of eligibility criteria that aims to facilitate customers of credit servicing firms in switching their mortgage to another provider. This development, announced by the Banking and Payments Federation Ireland (BPFI), comes in response to calls from Finance Minister Michael McGrath for banks to support mortgage-holders facing difficulties due to multiple interest rate hikes from the European Central Bank over the past year.

Ireland's Banks and Non-Bank Lenders Respond to Calls for Mortgage Support

The three major banks in Ireland, namely AIB, Bank of Ireland, and Permanent TSB, along with Avant Money, Finance Ireland, and ICS Mortgages, have all agreed to adhere to the initial criteria. Credit servicing firms, which act on behalf of loan owners to interact with borrowers, have committed to utilizing these criteria to facilitate customer switching and ensure that they are aware of the options available to them.

To be eligible to switch under these new guidelines, customers must be making full capital and interest repayments on their mortgage. Moreover, they must demonstrate sustainable income that is sufficient to repay the mortgage in its entirety over the loan's lifespan. Additionally, customers must have no arrears on their home mortgage or any other lending within the last two years. Each application will undergo a case-by-case assessment according to the individual lender's credit policy.

Currently, around 80,000 mortgages are being managed by credit servicing agents on behalf of investment funds in Ireland. However, approximately 30,000 of these customers are unable to move their loans due to poor credit history. This situation has been exacerbated by the fact that credit servicing firms primarily offer variable rate mortgages, leading to a significant increase in interest rates on these loans over the past year, with some reaching as high as 10%.

The criteria's development has gained support from major credit servicing firms, as well as Brokers Ireland and the Association of Mortgage Advisors. BPFI has published an information leaflet outlining the various elements of the agreed initial criteria that will be considered during the switching application process.

In the second phase of its Dealing With Debt campaign, BPFI has also announced a collaboration between credit servicing firms and the Money Advice and Budgeting Service (MABS) to expand a streamlined customer engagement framework. The objective is to expedite the establishment of sustainable repayment plans for customers facing financial difficulties. Pepper Advantage Ireland, one credit servicing firm, has already successfully implemented this plan, which includes bi-weekly forums with MABS regional offices to discuss individual cases and propose affordable solutions for customers unable to meet their mortgage repayments. The plan also incorporates an escalation process for particularly sensitive cases.

As part of this ongoing campaign, AIB, Bank of Ireland, and Permanent TSB have dedicated phone numbers with specialist support teams available for customers of credit servicing firms seeking information on switching options. Similarly, Avant Money, Finance Ireland, and ICS Mortgages have set up teams to address any queries from customers interested in switching.

With the introduction of these new eligibility criteria and the collaborative efforts to support customers facing mortgage difficulties, it is anticipated that more individuals will be able to explore the option of switching their mortgages to better suit their circumstances. The aim is to alleviate the financial burden caused by interest rate hikes and enhance financial stability for mortgage-holders in Ireland.