Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

What I am seeking to do is highlight the lack of consistency among the banks. I welcome the new split mortgage model AIB is rolling out, whereby if, over time, a borrower meets his or her obligations under the particular arrangement reached, more and more of the loan essentially can be written off. This is a progressive and innovative initiative and I congratulate AIB and the Irish Mortgage Holders Organisation on its being put in place. Ulster Bank is rolling out its economic concession, whereby some people have had the interest rates on to their mortgages reduced to 0.5%. If one is paying interest at a rate of 4.5% and it is reduced to 0.5%, it makes a massive difference. Again, this is a very innovative initiative. Bank of Ireland is taking a much more hard-nosed and tough approach. Perhaps this is being done at the bidding of the majority private sector ownership of the institution, but the advocates of borrowers and I have seen evidence of this approach.

It is welcome that increasing numbers of split mortgages are being offered. People still have concerns about the balloon payments which must be made at the end of the term of such mortgages. The AIB proposal is quite good in that regard. People are also concerned about the regular reviews that will be carried out. I am aware of split mortgage offers being made in circumstances where full reviews must be carried out every six months. These reviews involve individuals being put to a great deal of trouble because they are required to complete the standard financial statement form on each occasion. People are being denied the certainty they require in order to plan their financial future. I am not seeking uniformity of approach among the banks, but I am looking for a degree of consistency. For example, banks are still charging interest on the warehouse portion of some split mortgage models. That is not a sustainable or viable solution.

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