New supports for vulnerable mortgage borrowers welcomed

Framework will allow more people to save money by switching from credit service providers to mainstream banks

Mortgage holders will be able to move from credit servicing firms to mainstream banks to escape higher interest charges under a new framework that has been welcomed across the industry.

The new roadmap is one of a suite of measures outlined by the Banking & Payments Federation Ireland (BPFI), as part of its Dealing With Debt campaign.

AIB, Bank of Ireland, Permanent TSB, Avant Money, Finance Ireland and ICS Mortgages have agreed initial eligibility criteria to provide clear guidelines for home mortgage customers of credit servicing firms, such as Pepper, who are seeking to switch their mortgage.

Credit servicing firms have committed to working with these criteria to support customers switching and to ensure they are aware that they may have options to switch their mortgage.


Approximately 100,000 mortgages are managed by credit servicing agents on behalf of investment funds, with tens of thousands of borrowers unable to move because of a poor credit history.

Credit servicing firms do not offer fixed rate mortgages and borrowers who have loans with them can be asked to pay variable rates of as much as 10 per cent.

To be eligible to switch under the new guidelines, customers need to be making full capital and interest repayments on their mortgage and have no arrears in the past two years.

Once they meet these and other initial criteria, applications will be assessed on a case-by-case basis in line with individual lender credit policy.

As part of the new campaign, the credit servicing firms have agreed to work closely with the Money Advice and Budgeting Service (MABS) on a streamlined customer engagement framework to accelerate sustainable repayment plans for customers in financial difficulty.

The framework, which is already being implemented by Pepper Advantage Ireland, centres on biweekly forums with MABS regional offices to discuss individual cases and affordable and sustainable solutions for customers who are struggling to meet their mortgage repayments.

It also involves an escalation process for cases that are particularly sensitive.

The three retail banks – AIB, Bank of Ireland and Permanent TSB – have put in place dedicated phone numbers for customers of credit servicing firms who wish to better understand and discuss their options for switching.

Avant Money, Finance Ireland and ICS Mortgages also have teams in place to deal with any queries from customers looking to switch.

The chief executive of the BPFI, Brian Hayes, said the industry group and its members were “acutely aware of the difficulties being faced right now by many customers in light of the continued cost of living and interest rate pressures”.

He said the aim of the campaign is to “make sure that anyone who is worried or struggling with their mortgage or other loan repayments knows there is help available from their provider, including a wide range of short and long-term repayment solutions which can be tailored to each borrower’s circumstances”.

“It has been clear for some time that there is a need for customers of credit servicing firms to be offered greater assistance when switching mortgage providers,” said Trevor Grant of the Association of Irish Mortgage Advisors. “This has been particularly relevant for the past 12 months or so as we have seen a significant increase in variable and tracker mortgage rates.”

He said the new eligibility criteria agreed by mainstream mortgage lenders “should give many of these customers the opportunity to switch to more affordable mortgages. This, in turn, could help ease the impact of higher interest rates on them and reduce the risk of them falling into mortgage arrears.”

Welcoming the initiative, Brokers Ireland reminded mortgage holders running into difficulty to reach out for help before falling into arrears.

Its director of financial services, Rachel McGovern, said: “The earlier one seeks help the better because the outcome is likely to be more favourable.”

Conor Pope

Conor Pope

Conor Pope is Consumer Affairs Correspondent, Pricewatch Editor and cohost of the In the News podcast