Mr. Patrick Davitt:

The Government's model is not clear, but it seems it would guarantee part of a loan which is between 75% and 95% of value. This insurance is to mitigate against high lending. It is taken by a private insurance company on the basis that if somebody seeks a high loan to value mortgage a percentage is taken by the insurance company. Based on figures from a report launched this morning, between 2001 and 2011 the largest mortgage insurer in Ireland had approximately 70,000 high loan to value ratio loans with some of the main lenders. More than €70 million in claims have been paid to lenders to date. These 70,000 loans represent approximately 5.5% of the overall residential mortgages taken out in Ireland during the period. If one extrapolates the figures and looks at the basis of a universal mortgage scheme, which is what we are discussing, it could reduce by approximately €300 million the liability of these mortgages on a long-term basis. If any percentage over 75% exists in Ireland today, and assuming one in three mortgages go bad or default at some point, it could reduce this by a further €1.7 billion over the life of those mortgages. This has many advantages, including the cost of capital to the banks, because they would not have high loan to value ratios of 95%, as opposed to what they would have if there was no insurance to buy it.