Friday, 25 November 2022, 13:52
The government has approved changes to codes of practices for the banking industry with the aim of getting lenders to help their customers reduce the burden of mortgage payments over the next few years.
People on variable mortgages have seen the biggest percentage increase ever as the benchmark Euribor interest rate has risen from a negative of -0.5% about a year ago to 3% now.
The guidelines are voluntary, although the banking sector has said it will follow them providing profits aren't unduly affected. They are aimed at households deemed most at risk by their payments suddenly shooting up.
Different levels of relief will be available from participating banks from January - homeowners will need to agree the terms with their lender and generally will have to pay back the support now with mortgage payments spread later, over more years.
The most relief will go to households with income of less than 25,200 euros a year who have seen their mortgage payments exceed half their income and where they have gone up more than 50% recently. Here, homeowners can just pay the interest on the loan but not the capital payments for up to five years.
At the other end of the scale, those on up to 29,400 a year can just pay the interest for a year. All mortgage holders should find it cheaper to switch to fixed deals or pay off loans earlier.
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