Saturday 20 January 2018

BoI under fire for charges on split mortgage

Charlie Weston

Charlie Weston

PRESSURE is set to come on Bank of Ireland to change the way it treats homeowners in mortgage arrears.

Bank of Ireland is now one of the only lenders to impose interest on a split mortgage.

A split mortgage is where half of the loan is put on ice.

Danske Bank has become the latest lender to back away from charging interest on the "warehoused" portion.

"Danske changed its policy in May to the effect that it now does not charge interest on the warehoused portion," a spokeswoman said.

Permanent TSB, too, has confirmed to this newspaper it will no longer charge interest on the warehoused part.

No interest is imposed by AIB, EBS, Start Mortgages and ACC. Ulster Bank decides on a "case-by-case" basis.

KBC Bank said it was rolling out a split mortgage option. On interest, it said: "Specific terms of any resolution option is determined on a case-by-case basis."

Bank of Ireland and its subsidiary ICS charge the customer's existing interest rate on the part set aside.

A spokeswoman for the bank said it had no comment.

David Hall, of the Irish Mortgage Holders' Organisation, called on Bank of Ireland to change tack.

"Any split mortgage where interest is charged on the warehoused portion is a waste of time."

Irish Independent

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