Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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342. To ask the Minister for Finance whether he has any plans to reform the regulation of lifetime loan products issued by companies such as (details supplied) to strengthen consumer protection for borrowers and, as part of any such reform, to examine whether these consumer protections could be applied retrospectively to limit the amount of compound interest applied. [16556/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Lifetime mortgages are a particular type of mortgage 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 (though the borrower will have the right to repay some or all of the accumulated interest and/or the capital before then if so decided by the borrower); and
• the borrower retains ownership of their home whilst living in it.

The Central Bank advises that the particular firm referred to by the Deputy is authorised as a Retail Credit Firm and as such it is required to comply with all relevant requirements of financial services legislation, including the regulatory requirements set out in the Central Bank's existing codes of conduct and regulations. These include:

• the Consumer Protection Code 2012,
• the Code of Conduct for Mortgage Arrears 2013,
• the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Small and Medium-Sized Enterprises) Regulations 2015 (SME Regulations),
• the Fitness and Probity Regime,
• the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) Minimum Competency Regulations 2017, and
• the Minimum Competency Code 2017.

In particular, the Code requires that, prior to offering, recommending, arranging, or providing a lifetime mortgage to a personal 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.

The Central Bank has just completed an in-depth review of its Consumer Protection Code 2012, including the provisions relating to lifetime mortgages. Following this review, the new Consumer Protection Code 2025, which will come into effect next year following a 12-month implementation period, contains strengthened disclosure requirements for lifetime mortgages.

These include a requirement for firms to provide consumers with information on which party is liable for any redemption costs, whether the consumer or their estate will be liable for any shortfall following the eventual sale of the property and details of any costs which may apply over the term of the lifetime mortgage or on the sale of the mortgaged property.

In addition, the new Consumer Protection Code 2025 will enhance the warnings associated with the provision of lifetime mortgages and it also changes the definition of lifetime mortgage to extend it to second properties.

More information on the new Consumer Protection Code 2025 is available under the Regulation section of the Central Bank website.