Mr. Stephen Bell:

The reason we have had so little uptake for the split mortgage product is that when we have offered the customer the choice between a split mortgage and the economic concession product, they tend to prefer the economic concession. The way it works is that we will agree to lower the interest rate and it can go as low as 0.5%, although not all cases are at 0.5%. That concessionary rate can be for a period as long as seven years but they are not necessarily all for that period. We picked seven years because we try to be complementary to the work of the personal insolvency service and we wanted to ensure that at the period end the customer would be able to resume normal service. Because of the way that works, the vast majority of the customer's monthly repayments goes towards paying down capital.

They will not service interest unduly because the interest rate has been set at such a low level. What one finds, therefore, over a medium to longer term forbearance period is that the balance the customer owes reduces and when the forbearance period ends the balance he or she must service on the original interest rate has been substantially reduced.