Oireachtas Joint and Select Committees

Wednesday, 9 April 2014

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB

11:30 am

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent) | Oireachtas source

I want to bring two points together, one of which the Chairman mentioned, what happens at retirement. I accept the split mortgage can work and the bank takes a real hit and there is a real financial gain to the borrower. It falls down, however, on retirement. I have publicly advocated a debt-for-equity solution initiating at the restructure. It can certainly be used at retirement when the split mortgage is turned into a debt-for-equity. AIB is considering this. Mr. O’Sullivan has a reasonable concern that because household income halves, approximately, on retirement that raises a concern about affordability. Debt-for-equity gets rid of all that risk and maintains the asset position for the bank because it is converting part of the mortgage into equity in the house. Has permanent tsb considered this or will it do so?

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