Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance if he will confirm the criteria that applies in respect of the split mortgage arrangements; if he will confirm, for each of the regulated banks whether or not the shelved portion of the mortgage accrues interest; and if he will make a statement on the matter. [13506/13]

Michael Noonan (Limerick City, Fine Gael)
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I have been informed by the Central Bank that the majority of lenders have introduced, or are in the process of introducing a split mortgage arrangement. The split mortgage was one of a number of arrangements suggested by the Inter-Departmental Mortgage Arrears Working Group (Keane Group) Report which was published in September 2011.

The concept involves splitting a distressed mortgage into an affordable mortgage and warehousing the balance. While lenders have taken the broad approach set out in the Keane Report, the product details vary from lender to lender. I am informed by the Central Bank that the most notable difference involves the interest rate charged on the warehoused element of the split mortgage varying from 0% up to the full mortgage interest rate. In cases where an interest rate is charged on the warehoused element, some lenders require borrowers to service this payment on a monthly basis while others allow the interest to accrue on the warehoused element.