Written answers
Thursday, 3 April 2025
Department of Finance
Company Law
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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14. To ask the Minister for Finance if he plans any changes to the regulation of companies offering re-mortgage of properties, especially in the context of older citizens; and if he will make a statement on the matter. [15820/25]
Paschal Donohoe (Dublin Central, Fine Gael)
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There is a comprehensive legal and regulatory framework governing the provision of credit to consumers, and which applies to all borrowers. However, the Deputy refers to companies offering to re-mortgage of properties, especially in the context of older citizens, and in that context I assume he specifically referring to lifetime mortgages.
Lifetime mortgages are a particular type of credit product which is usually provided to borrowers aged 60 years where:-
- the interest payments are rolled up on top of the capital throughout the term of the loan;
- the loan is repaid from the proceeds of the sale of the property; and
- the borrower retains ownership of their home whilst living in it.
In particular, the Code requires that, prior to offering, recommending, arranging, or providing such a credit product to a consumer, a regulated entity must inform the personal consumer of the consequences of purchasing a lifetime mortgage and provide information on:
- the circumstances in which the loan will have to be repaid;
- details of the interest rate that will be charged;
- an explanation of the impact of the rolling up of the interest over the duration of the loan;
- an indication of the amount required to repay the loan at maturity;
- the effect on the existing mortgage, if any; and
- an indication of the likely early redemption costs which would be incurred if the loan was redeemed on the third and fifth anniversary of the loan and at five yearly intervals thereafter.
As with all mortgages, the Code also requires the provision, on an annual basis at least, of a statement of account to include the opening balance, all transactions, all interest charged, all charges, the outstanding balance, and the details of the interest applied to the account during the period covered by the statement.
As the Deputy is aware the Central Bank has just completed out an in-depth review of its Consumer Protection Code and which includes updated provisions in relation to the provision of credit to consumers, including in relation to lifetime mortgages.
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