Saturday 10 December 2016

3,000 mortgages a month now being restructured

Charlie Weston Personal Finance Editor

Published 02/04/2010 | 05:00

CLOSE to 3,000 mortgages a month are being restructured, it has been estimated.

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Lenders are showing forbearance by allowing borrowers to take a payment holiday, pay interest only or extend the term of the mortgage.

Bank of Ireland admitted on Wednesday that it was restructuring 700 mortgages a month.

As one of the largest lenders in the market, it has 199,000 mortgages. This equates to 25pc of the market, as there is a total of 792,893 residential mortgages, according to figures from the Financial Regulator.

If Bank of Ireland's figure for mortgage restructuring is applied across the market, it means that almost 3,000 mortgages a month are currently being restructured.

The Irish Banking Federation (IBF) revealed earlier this year that more than 30,000 homeowners had already renegotiated their mortgages.

But a spokesman for the federation admitted yesterday that this figure dated back to the first or second week in January and that the total was likely to have risen in the meantime.

Repossessions

The number of those who have got their lender to restructure their mortgages is thought to be in addition to the more than 28,000 homeowners who are three months in arrears with their repayments.

However, the IBF said there had been a drop in the number of repossessions, compared with last summer.

The federation said its members were making every effort to avoid repossession and that the overall rate was running at 13 repossessions per 100,000 mortgages, compared with 93 per 100,000 in the UK.

A group headed by insolvency expert Hugh Cooney has met a number of times in a bid to come up with responses to the problems of mortgage arrears and personal debt by this June.

Many commentators have expressed fears that moves by banks and building societies to increase the rates of interest charged on standard-variable and fixed-rate mortgages will push more people into arrears.

Bank of Ireland is to raise its mortgage rates this week in a move that will hit thousands of homeowners. It is set to follow the lead of Permanent TSB and AIB by hiking rates for existing customers with standard-variable and fixed-rate mortgages.

Rates are set to rise by 0.5pc, a move that will cost a homeowner with a €250,000 mortgage an extra €65 a month.

This is set to be swiftly followed by EBS Building Society and its broker-focused operation Haven, which will raise mortgage rates for existing standard variable-rate borrowers.

After the move by AIB last week to increase its rates by up to 0.5pc, Bank of Ireland is now the best value provider of standard-variable and five-year fixed rate mortgages.

Bank of Ireland currently has the best value standard-variable rate of 2.3pc for those who are borrowing less than half the value of their home.

Irish Independent

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