Time is running out for older cohort of distressed borrowers

Central Bank deputy governor comments a wake-up call to lenders

Ireland's mortgage arrears problem is not going away. If anything, it is becoming more acute – especially for an older cohort of distressed borrowers.

Central Bank deputy governor Ed Sibley this week disclosed that a quarter of all those in long-term arrears on their mortgage payments are in their 60s or older. That is more than 7,000 people or families living in dread of losing their homes.

As they enter their 60s, they are running out of road in terms of earning capacity. Just when they are supposed to be looking towards retirement and a slower, more relaxed pace of life, they are instead growing ever fearful that any chance of overcoming their financial issues is fast diminishing.

Sibley's comments came in an address to the Banking and Payments Federation of Ireland – the industry body that represents the banks. In essence, it is a wake-up call to lenders that their customers who are in financial trouble are not a homogenous group to which a common solution can be applied.


He drew particular attention to banks’ reliance on arrangements that involve paying only the interest on the loans over a long period without any assessment of the practicality of the outstanding lump sum capital ever being payable.

He said greater innovation was required with a focus on resolving the long-term affordability issues. In other words, as Brokers Ireland – the organisation representing mortgage brokers among others – put it more bluntly: stop kicking the can down the road.

Everyone accepts the banks are making efforts to help their customers address the issue.

The concern is that lenders appear to settle on one or a small suite of preferred solutions and then try to shoehorn very different problems into that one arrangement.

Time is running out for a substantial number of these customers. Putting the issue on the banks’ long-finger is a solution for no one. Pain is inevitable but it must be shared.