AIB will look to use peoples’ pensions to repay any parked mortgage debt in long-term restructurings for struggling homeowners.
According to Simon Carswell in today’s Irish Times, under new split mortgages being offered to customers, the bank will “park” a portion of the mortgage and the customer will not be charged interest or capital on this amount.
AIB, and its subsidiary EBS, will review the customer’s financial situation every two years to see if they can repay more off their mortgage, allowing it to reduced the parked amount.
However, if there is still an amount owing on the “parked” sum by the time the customer retires the bank will look to use part of their pension to clear the outstanding amount or force the borrower to trade down with a portion of the sale of the original property being used to clear the debt.
Read more in today’s Irish Times.