Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank Deputy Jim Daly for raising this issue. I am not sure my scripted response will be an appropriate answer to the issues he has raised now, but I will read it anyway and we can talk about it at the end.

As Deputies will be aware, the code of conduct on mortgage arrears, CCMA, provides a strong consumer protection framework for borrowers. One of the elements contained in the code is protection for borrowers who have tracker rate mortgages. Recent data published by the Central Bank indicate that 52%, or approximately €60 billion, of the balances outstanding for credit advanced to Irish resident households for home purchases is at a tracker rate. At the outset, it is important to state that lenders cannot remove a borrower's tracker rate just because the borrower is in arrears. The Central Bank has published guidance to support borrowers and the website keepingyourhoime.iealso has information to assist borrowers. Furthermore, there are a number of support bodies, such as the Money Advice and Budgeting Service, that can provide essential assistance to borrowers who are dealing with arrears.

On the issue of tracker mortgages specifically, the Central Bank has carefully considered whether there are any circumstances which would merit a lender offering a borrower an arrangement which resulted in the borrower changing from his or her existing tracker rate and concluded that there may be exceptional cases where this could arise in order to prevent the borrower losing his or her home. Consequently, the CCMA provides that the lender must not require the borrower to change from an existing tracker mortgage to another mortgage type, as part of any alternative repayment arrangement offered to the borrower, except in prescribed circumstances.

Provision 39 of the CCMA requires that in order to determine which options for alternative repayment arrangements are viable for each particular case, a lender must explore all of the options offered by that lender. If the lender concludes that none of the options that would allow the borrower to retain his or her tracker interest rate are appropriate and sustainable for the borrower's individual circumstances, provision 46 of the CCMA provides that the lender may offer the borrower an alternative repayment arrangement which requires the borrower to change from an existing tracker mortgage to another mortgage type, if the proposed alternative repayment arrangement satisfies the following conditions: all other options, which would retain the tracker rate, have been considered to be unsustainable; it is affordable for the borrower; and it is a long-term sustainable solution which is consistent with Central Bank of Ireland policy on sustainability.

In addition, the CCMA requires lenders to explain in the offer letter the reasons the alternative arrangement offered is considered to be appropriate and sustainable as well as the advantages and any disadvantages or potential disadvantages of any arrangement offered, with regard to the individual circumstances of the borrower. Furthermore, and importantly, lenders must engage with the Central Bank on any proposal to avail of provision 46 of the CCMA. This means there are further strong protections in place. The Central Bank has indicated that to date no lender has engaged with it on developing any such products.

This was also confirmed in the outcome of the Central Bank's recently published report on its themed inspection on compliance with the code of conduct on mortgage arrears. During this inspection all lenders confirmed that, as a matter of policy, they do not require, and have not required, borrowers to move from a tracker mortgage rate to a more unfavourable rate during the lifetime of the mortgage.

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