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One-in-five can pay mortgage but won't, claim analysts

ONE-in-five mortgage holders are postponing payments in a bid to win concessions from lenders -- even though they can afford to pay.

It was claimed today that some householders were taking advantage of banks by trying to do an unnecessary debt deal.

But for others the very real effort to dig themselves out of financial difficulties is a daily battle.

Analysts today advised tracker mortgage holders to negotiate a 25pc cut on their loan if their bank wants them to switch from their lucrative rate.

Meanwhile, struggling homeowners in serious mortgage debt are desperately looking for ways out of their predicament.

Once the State's largest mortgage lender, Permanent TSB said that 25pc of its Irish buy-to-let mortgages were now classified as non-performing.

And a total of 20,816 cases are now in arrears of 90 days, rising to 12pc of the total from 6.8pc a year earlier.

Karl Deeter, of Irish Mortgage Brokers, said the rising level of mortgage arrears in Ireland was due to a significant amount of borrowers holding back on payments.



A high proportion of mortgage holders believe that they might get "some kind of debt deal" from their bank due to changes made by the Financial Regulator.

But claims made by Mr Deeter that mortgage-holders across the country were "strategically" falling behind on their payments were rejected by the Free Legal Advice Centres.

Director Noeline Blackwell conceded that while some people were "undoubtedly abusing the system", it was impossible to establish the true numbers.

Ms Blackwell said that banks may have suspicions about their own customers but that was just "speculation".

Separately, mortgage experts have urged those with tracker rates not to switch unless they secure at least a 25pc writedown on their loans.

The Irish Brokers Association has carried out research that shows tracker mortgages are valuable commodities. The IBA's study based on a €200,000 tracker mortgage at the current ECB rate of 1pc would be €1,019.28 per month for 20 years.

A standard variable mortgage at 5.2pc would cost €1,306 per month.

Over the life of the mortgage, the tracker would be €51,306 cheaper than the variable mortgage.

clairemurphy@herald.ie


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