Saturday 24 March 2018

Consumers paying card debts before mortgages

Charlie Weston Personal Finance Editor

MORTGAGE brokers have warned that people are paying credit-card bills before their home loans because card companies are pursuing the debt "to the bitter end".

While the code of conduct for mortgage arrears means banks cannot make more than three unsolicited communications with mortgage holders a month, there are no restrictions on how many times a credit-card company can contact its customers and pressurise them to repay the debt.

The Irish Brokers Association (IBA) has warned that the pressure coming from credit-card companies has now distorted the market as people are no longer prioritising their home-loan repayments.

IBA chief executive Ciaran Phelan said consumers were paying credit cards and personal loans ahead of their mortgages because "he who shouts loudest was getting paid first".

"Without the protection currently afforded to mortgage debt, banks and other creditors are free to pursue short-term debts to the bitter end," Mr Phelan said.

Some 60,000 people are three months or more behind on their mortgage payments.

Mr Phelan said the indications were fewer people than this were behind on their credit-card repayments. "This was because people were prioritising their short-term unsecured debts ahead of their secured long-term debts," he said.

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