You can now extend your mortgage until you are 90!

PIA approved to age 90
Click to expand...
That is a good and fair outcome though. She can live in it as long as she is alive and the house is sold and proceeds are to pay off loan on her death. I suppose the burning question will be inflation and how long she lives for. It's kind of like a life loan with no interest from what I can see.

Although if she clicks down in coppers it could get complicated :)
 
www.irishtimes.com

Court ruling could help up to 20,000 people in Celtic Tiger-era debt

Court permits 54-year-old woman to keep paying mortgage until she is 90
www.irishtimes.com www.irishtimes.com

Ground breaking judgment now allows people to extend their home mortgage until they are 90. Mr Justice Sanfey described the solution as “an exemplary illustration” of how the insolvency system should work, while recognising the unusual long-term nature of the proposal.

Credit should be given to https://www.linkedin.com/company/start-mortgages-dac/ (Start Mortgages DAC) who supported the PIA.

The big question is: Would the High Court have approved the PIA if Start had not supported it?

Jim Stafford
 
Read that this morning Jim. It should be used sparingly though. There is usually a drop in income when people retire, so debt then takes up a larger percentage of a persons income. Being obligated to a bank for basically the rest of a persons life is not a good situation to be in. I can imagine the Joe Duffy shows now..."my mum is still paying her mortgage at 85. We didn't think we'd have to pay it for that long, even though we signed up to an agreement for payments to age 90. We thought they'd let her off at some stage."

I see that in this case, they didn't really have much of an option and that is when it should be used. It should be a last resort.
 
Last year a 62 year old Meath builder got a 30 year interest only ( Tracker at 0.8% ! ) mortgage as part of a PIA so I'm not sure why this case is receiving so much attention.
 
I'm looking forward the courts letting me live alone in my three bed house until I'm 90 if I end up not being able to afford it in the next few years.
Nice country we live in...
 
Forget PIAs for the moment.

There is nothing wrong with an interest only mortgage at market rates for an indefinite period.

If a 65 year old has a mortgage of €100k at 3% on a house worth €300k, the bank should be happy to switch the mortgage to interest only until the person dies or sells the house.

That is a very profitable loan for the bank. Why would they want it repaid earlier? They will just have to find a new customer to lend it to.

That is why you have life loans. Seniors Money will provide a loan and roll up the interest until the person dies.

But the stupid Central Bank rules say that a mortgage is not performing if it is not repaid by the original scheduled date and so the banks have to allocate more capital to it. It becomes very expensive to provide such a loan.

There is absolutely no law that someone in retirement can't rent a property for the remainder of their life. Why should there be a ban on them renting money for the rest of their life?
 
Last edited:
Now look at PIAs

It's outrageous that the Court could impose a PIA at a cheap mortgage rate for a long term.

If they wanted to impose an interest-only indefinite term mortgage on a lender, they could do so at the market rate or set a rate such as ECB +3%.

And of course, many of these borrowers will continue to play the system. They will pay nothing anyway, and it will be impossible and/or very expensive for the lender to do anything about it.

It is part of the reason why we have the highest mortgage rates in the eurozone. Everyone else is paying for the court's generosity towards these borrowers.

Brendan
 
Because it should not be up to the PIP or the court to decide who is better off.

If the borrower is in deep default, the lender should have the choice of enforcing its security.

Brendan
 
Last edited:
Brendan Burgess said:
Because it should not be up to the PIA or the court to decide who is better off.

If the borrower is in deep default, the lender should have the choice of enforcing its security.

Brendan
Click to expand...

It makes no sense to me that a bank who would be worse off by enforcing it's security should be allowed to do so.

Plenty of deep arrears mortgages and in negative equity out there could still be sorted out at a rate of 2% IO over a very extended period. In Ireland if you're in deep arrears you get charged about 4.25% and on an annuity basis and they want you to have it paid off by aged about 70. The most powerful man in the world rocked up to his new job aged 78.

The rationale of the banks here is akin to a weightlifter who fails three times at 200kg then being asked to have a go at 400kg !
 
demoivre said:
In Ireland if you're in deep arrears you get charged about 4.25% and on an annuity basis
Click to expand...

Where are you getting this from?

And what does "an annuity basis" mean in this context? It means nothing if the person is paying nothing.

Banks will not lend if they can't enforce their security. The courts should not second guess the credit decisions of lenders and certainly should not set the interest rates.

Brendan
 
ClubMan said:
I'm looking forward the courts letting me live alone in my three bed house until I'm 90 if I end up not being able to afford it in the next few years.
Nice country we live in...
Click to expand...
Actually it is doing you a favour.

There is no chance this lady could afford private rental without HAP. The other alternative is social housing on a pittance rent.

Both of these options are paid for in taxation at some point.

However instead of it costing your council, start will get 3% pa and will get their capital back at some point and there might be a few bob left.


Good to see this happening, but where there are children, then just like the life loans, they need to know that they come second in the queue when the house is sold
 
You must log in or register to reply here.
Back
Top