Business Property & Mortgages

Thursday 28 August 2014

PTSB first bank to offer long-term deals on mortgages

Peter Flanagan and Charlie Weston

Published 27/03/2013 | 05:00

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STATE owned Permanent TSB has become the first of the big lenders to offer long-term mortgage deals to struggling homeowners.

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Some 500 distressed borrowers have been offered deals such as split mortgages where part of their loan has been set aside. Just 1pc interest will apply to the part of the mortgage that has been parked.

It's the first evidence that a bank is responding to government and Central Bank targets to deal with the mortgage crisis.

The bank said the trial will cover 500 borrowers for now but will be ramped up if the scheme is deemed a success.

The trial began in January and will be completed at the end of July. At that point the bank will assess whether the borrowers can achieve the new repayment plan or not.

The restructuring methods range from "interest only" repayments to having customers base their payments on half the loan principle, with the remainder being "parked" until a later date.

Permanent TSB is currently dealing with thousands of customers who are having difficulty making their payments.

If a customer claims they cannot make their payments under the current conditions, then they are required to provide a standard financial statement (SFS) detailing their income and expenditure.

The bank has received around 5,000 of these so far.

Company chief executive Jeremy Masding emphasised yesterday the need for people to contact the bank and engage with them in an effort to get some sort of deal worked out. "If a customer doesn't engage with us, that only leaves us (tougher) options that we want to avoid if at all possible," he said.

Permanent TSB has been crippled by its mortgage book since the crisis struck. The biggest mortgage lender during the boom has about 15pc of its mortgage book in arrears, far higher than the overall rate of 12pc.

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