Bank of Ireland has announced that it has launched a range of new mortgages available to customers in negative equity.
The bank says the new mortgages are in line with Central Bank guidelines, and they say, will allow greater numbers of customers, that are in negative equity to move home.
Customers will undergo a full assessment, says the bank and must demonstrate that they can afford the new mortgage.
The mortgages will be offered in two forms – one for those in negative equity who wish to move to a property of a higher value, and one for those who wish to dispose of their current home and move to a home of lower value.
The Trade Up Negative Equity loan will enable customers who are in negative equity to sell their current home and move to a higher value property, carrying over an amount of negative equity to the new mortgage. The Trade Down Negative Equity loan will enable customers who are in negative equity to sell their current home and move to a lower value property, while carrying an amount of negative equity to the new mortgage.
Jonathan Byrne, head of mortgages at Bank of Ireland, speaking on Morning Ireland, said that the new products have been agreed with the Central Bank. He said that 50% of the bank’s residential mortgages were in negative equity.
He said the new products weren’t aimed at all of those in negative equity, but that customer feedback had indicated that there were customers of the bank who needed to move, perhaps because of a new job, or because of a growing family, and that these products could cater for some of those.
He pointed out that it isn’t going to be the only solution available, and that this wouldn’t allow for any debt relief.
With regard to tracker mortgages, he said that for customers trading up, that they wouldn’t be in a position to bring their tracker interest rate with them, but that for customers trading down, that the bank had agreed with the central bank that retaining the tracker rate was allowed.