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

As the Deputy said, I met the mortgage industry on 31 August 2023. Attendees included the Banking and Payments Federation Ireland, BPFI, CEOs and senior representatives of all the main mortgage lenders and servicers, including: AIB; Bank of Ireland; Permanent TSB; Pepper; Mars Capital; Avant Money; Dilosk; and other mortgage entities. The Central Bank of Ireland also attended. The Insolvency Service of Ireland, the Citizens Information Board and the Money Advice and Budgeting Service, MABS, indicated at the meeting that, from the inquiries coming to them, there is an increasing number of borrowers who are encountering difficulty in meeting their mortgage repayments.

The Government is acutely aware that the increase in the level of interest rates, in addition to the general increase in the cost of living, is causing difficulties for many mortgage holders. I made it clear that banks and all other mortgage entities should be fully aware of the significant challenges that some of their customers are facing and, therefore, lenders and servicers should respond by assisting their customers who are experiencing difficulty. I also highlighted that greater clarity should be provided to customers on the possibility of switching provider and that this option should be fully supported by all mortgage entities, including the existing mortgage creditor, as the level of switching between firms is low. Further, I supported the steps taken by the Central Bank to ensure that firms proactively deal with emerging difficulties for their customers since the increase in interest rates. The Central Bank requires firms to enhance the range of supports available to borrowers in or facing arrears and to have sufficient operational capacity to manage applications by borrowers to switch their mortgage or mortgage provider.

Arising from that meeting, on 6 September, BPFI announced a number of further initiatives by the mortgage industry. These included a second phase of a dealing with debt campaign; mortgage servicing firms and MABS to collaborate on an expansion of streamlined customer engagement framework and the provision of initial eligibility criteria by the main lenders to provide clear guidelines for home mortgage customers of credit servicing firms who are seeking to switch their mortgage. This means that, for the first time, there is an agreed industry-wide set of eligibility criteria to facilitate people switching their mortgage from a non-bank to a bank. All the banks and some other lenders, like Avant Money, ICS Mortgages and Finance Ireland, have signed on to that set of criteria, which is a significant change and brings clarity to mortgage holders. These new measures are additional to those provided for in the existing regulatory framework. Separately, Pepper has introduced a new discounted two-year fixed rate alternative repayment arrangement, ARA, option for borrowers in arrears, which increases the range of options for Pepper customers entering into an ARA.

See this speech in context