Mortgages and financial difficulty 

If you are experiencing financial difficulty, or if you are concerned about your mortgage repayments, you should talk to your lender as soon as possible. Even if you haven’t missed a payment yet, if you are experiencing any difficulty with making that payment, you should contact your lender to see how they can support you. You should not ignore the situation.

If you do not engage with your lender, your lender cannot assess your financial situation and cannot help you get back on track with your mortgage. Early engagement with your lender may prevent your financial situation from worsening.

Your lender will provide you with an information booklet that explains, amongst other things, your lender’s procedure for dealing with borrowers in financial difficulty, as well as relevant timelines. It is important that you read this carefully, and get appropriate advice if you need it, so that you are clear on the process that your lender will follow to get you back on track with your mortgage.

You will need to provide information about your overall circumstances, including your personal financial situation. The reason for this is to enable your lender assess which solutions may be appropriate and sustainable for you.

Following a review of your financial situation, your lender may offer you an alternative repayment arrangement (ARA). An ARA is a new agreement with your lender to address arrears or financial difficulties.

There are many different ARAs that your lender may be able to offer you. Your lender will explain the reasons why they are offering you a specific ARA, and also the reasons why they are not offering you other types of ARA.

Your lender is required to engage with you - in line with the Consumer Protection Code and the Code of Conduct on Mortgage Arrears – to aim to deliver appropriate and sustainable solutions and facilitate as many borrowers as possible to return to repaying their debt.

You should also consider contacting the Money Advice and Budgeting Service (MABS) who may be able to help you. MABS is the state’s money advice service and can help you if you have problem debt, or if you feel like your debts are in danger of becoming a problem. MABS is free, confidential and independent.

The state also provides support to mortgage borrowers who are in financial difficulty. MABS will be able to advise you if you are eligible.

The Central Bank has a statutory Code of Conduct on Mortgage Arrears (CCMA) to help you if you are already or facing difficulty paying your mortgage. This CCMA is designed to protect you and lenders are legally obliged to comply with it. Under the CCMA, your lender is required to:

• Treat your case sympathetically and positively, with the aim of getting you back on track with your mortgage.
• Provide dedicated and specially trained staff to manage your case. This includes having any meetings with you in private and referring you to their relevant information.
• Follow the Mortgage Arrears Resolution Process (MARP) which sets out how your lender must communicate with you, and assess your situation with the aim of coming to a resolution.
• Have an appeals process in place so you can appeal certain decisions of your lender.

Lenders must engage with you to aim to deliver appropriate and sustainable solutions and facilitate as many borrowers as possible to return to repaying their debt.

However, the protections of the CCMA only apply to borrowers who engage with and co-operate with their lender. This is why if you are experiencing financial difficulty, or if you are concerned about going into mortgage arrears, you should talk to your lender as soon as possible. You should not ignore the situation.

For more detailed information on how the Central Bank protects borrowers in, or facing, mortgage arrears on their home, see our explainer: How does the Central Bank protect me if I can’t pay my mortgage? and consumer guide: Code of Conduct on Mortgage Arrears - A Consumer Guide.

Central to the CCMA is the Mortgage Arrears Resolution Process. This details how your lender must treat you with the aim of resolving your situation. It has the following four components:

• Communication

  This sets out how your lender communicates with you.  For example, your lender cannot contact you excessively, and must provide you with information to help you understand your situation.

• Financial information

  In order to assess your mortgage problem, your lender will need to get information from you about your personal financial situation. To do this your lender will ask you to complete a “Standard Financial Statement”. This allows your lender to see all of your monthly income and outgoings. For help completing this statement see our consumer guide.

• Assessment

  This is where your lender assesses your case and decides whether it can offer an appropriate and sustainable alternative repayment arrangement on your mortgage. Every case is different and your lender needs to carefully assess your personal financial circumstances before making this decision.

• Resolution

  This is the point at which your lender either offers you an alternative repayment arrangement or decides not to. If your lender does not offer you one, it must explain the reasons why. You can appeal this decision to your lender’s Appeals Board. 

Another important protection of the MARP is that you must be given at least eight months from the date your mortgage arrears arose, or three months from the date an alternative arrangement could not be agreed (whichever is later), before your lender can take legal proceedings against you. However, this only applies provided you co-operate with your lender.

If you are experiencing financial difficulty and engage with your lender, your lender can assess your financial situation and help you get back on track with your mortgage.

Early engagement with your lender may prevent your financial situation from worsening.  Even if you haven't missed a payment yet, if you experiencing any difficulty with making that payment, you should contact your lender to see how they can support you.

Under the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA), lenders are obliged to assist borrowers as far as possible taking into account his/her particular circumstances.

Many of the protections that the Central Bank has in place under the CCMA are only available to borrowers who are cooperating with their lender to address the arrears situation.

If you engage with your lender, your lender may offer you an alternative repayment arrangement (ARA) which is a new agreement with your lender to address arrears or financial difficulties.

If you are in arrears and don’t engage or cooperate with your lender, you risk being classified as “not cooperating.”

If this happens, your lender will notify you that you have lost the protections of the MARP.

This means your lender can start legal proceedings immediately, which could result in you losing your home.

For this reason, it is very important to always engage with your lender and continue to do so throughout the process. Even if legal proceedings have already started, under the CCMA a lender can still agree an alternative repayment arrangement with you.

Non-cooperation may also impact your eligibility for a debt solution, such as a Personal Insolvency Arrangement. In addition, your lender may impose charges and/or surcharge interest on arrears arising on your mortgage account.

Where you are in arrears, or are concerned about your mortgage repayments, your lender is obliged to provide you with a copy of its Mortgage Arrears Resolution Process (MARP) booklet. This includes:

You can also take a look at your lender’s website for details on how they manage mortgage arrears and what solutions they offer to borrowers in financial difficulty, or who are concerned about going into mortgage arrears.

Lenders must treat your case sympathetically and positively, with the aim of getting you back on track with your mortgage. Lenders must not communicate in a manner that is excessive, aggressive, intimidating or harassing. Lenders have to provide you with sufficient time to complete an action before they follow up with you on the status of that action, and agree with you how future communications will be managed.

Under the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA), each lender has an obligation to assess your full circumstances including:

• Your personal circumstances
• Your overall indebtedness
• The information you provide in the Standard Financial Statement 
• Your current repayment capacity
• Your previous repayment history.

Lenders have obligations to assist you as far as possible taking into account your particular circumstances.

If you are in financial difficulty or are concerned about going into mortgage arrears, the Money Advice and Budgeting Service (MABS) may also be able to help you.

A Standard Financial Statement (SFS) is a document which your lender will use to gather financial information from you to complete an assessment of your circumstances.

The SFS is used by your lender when assessing your case to decide whether it is possible to offer you an ARA and what type of arrangement is appropriate and sustainable for your circumstances.

The Central Bank has published a guide to assist you with completing the SFS.

In addition, your lender is required to:

• Provide you with the SFS at the earliest appropriate opportunity
• Offer to assist you with completing the SFS
• Inform you that you may wish to seek independent advice to assist you in completing the standard financial statement, for example, from MABS or an appropriate alternative.

An alternative repayment arrangement (ARA) is a new agreement with your lender to address your financial difficulties. The purpose of an ARA is to help you get back on track with your mortgage.

Following a review of your circumstances, your lender may offer you an ARA.

ARAs may include:

• Interest only repayments on the mortgage for a specified period of time
• Permanently reducing the interest rate on the mortgage, or temporarily reducing the interest rate on the mortgage for a specified period of time
• An arrangement to pay interest and part of the normal capital amount for a specified period of time
• Deferring payment of all or part of the scheduled mortgage repayment for a specified period of time
• Extending the term of the mortgage
• Other, as deemed appropriate by the lender.

In order to determine which ARA may be appropriate and sustainable for your individual financial circumstances, your lender must explore all of the options they offer for ARAs.

It is a commercial decision for each lender to decide what ARAs it may offer to borrowers in financial distress.

Lenders must engage with you to aim to deliver appropriate and sustainable solutions and facilitate you to return to repaying your mortgage. 

Before completing the full assessment of your SFS, your lender may agree with you to put a temporary ARA in place to prevent your financial difficulties or arrears situation getting worse.

If your lender offers you an ARA, your lender has an obligation to explain any financial costs that may arise.

If there are financial costs, these can be reduced if you pay as much as you can towards your mortgage. Your lender will explain to you how you can reduce your financial costs.

Paying as much as you can at any time, even if this is a small amount, can reduce your longer term cost of credit.

Your cost of credit is the difference between the amount you borrow and the total amount you repay over the lifetime of the loan. Cost of credit can be influenced by interest charged, fees, repayment frequency, the term of your loan and other charges.

If your lender offers you an ARA, it must provide you with a clear explanation, in writing, of how the ARA works, including:

• The new mortgage repayment amount
• The length of time that the ARA will be in place
• The implications, if any, arising from the ARA for the existing mortgage including the impact on the mortgage term, the balance outstanding on the mortgage loan account, and the existing arrears on the account, if any
• Details of any residual mortgage debt remaining at the end of the ARA
• How interest will be applied to your mortgage loan account as a result of the ARA.

Your lender will also advise the reasons why the ARA offered is considered to be appropriate and sustainable for you by reference to your individual circumstances, and must also advise the advantages of the offer to you, as well as explaining any disadvantages.

Your lender will also explain to you, in writing, the reasons why it does not consider other ARAs to be appropriate and sustainable for you.

You should take appropriate independent legal and/or financial advice on the ARA that your lender offers you. The Money Advice and Budgeting Service (MABS) may also be able to advise you.

If your circumstances change after agreeing an alternative arrangement, including if they improve, you should let your lender know as soon as possible. The arrangement you are on might not be appropriate any longer, so they will review and consider what other options are available.

It is a requirement of the Code of Conduct on Mortgage Arrears that your lender must carry out a review of an ARA at any time, if requested by you.

Yes. Your lender must have an Appeals Board where you can appeal their decision to:

• Offer you an ARA that you do not agree with
• Refuse to offer you an ARA
• Classify you as not co-operating.

In all of the above situations, your lender must explain to you the reasons for their decision in writing. You lender must also inform you (amongst other things) of the other options available to you, such as voluntary surrender, mortgage to rent or voluntary sale and the implications of each option for you and your mortgage loan account and the importance of seeking independent advice in relation to these options.

The Appeals Board is made up of three of the lender’s senior personnel who have not yet been involved in your case. At least one member of the Appeals Board must be independent of the management team and must not be involved in lending matters.

Any appeal to your lender’s Appeals Board must be made in writing and your lender must acknowledge receipt of that appeal in writing within five business days of the appeal being received.  Your lender must also provide you with the name of one or more individuals appointed to be your point of contact in relation to your appeal.

A lender must allow you a reasonable period of time to consider submitting an appeal. At a minimum, this must be 20 business days from the date you were notified of your lender’s decision to classify you as not co-operating, or its decline to offer you an ARA, or its decision to offer you an ARA but where you are not willing to enter that ARA.

Your lender then has maximum 40 business days to consider and adjudicate on your appeal.

Following the decision of the Appeals Board being made, your lender then has a maximum of five business days to notify you in writing of the decision of the Appeals Board and to explain to you the reasons for the decision and the terms of any offer being made.

If you are not satisfied with the Appeals Board decision, you have the right to refer the matter to the Financial Services and Pensions Ombudsman (FSPO). You lender must advise you of this right, and provide you with the contact details for the FSPO.

No, the Central Bank has no remit over individual credit decisions made by lenders. These are commercial decisions for each lender, and the Central Bank does not have the mandate or ability to compel a lender to provide an alternative repayment arrangement to particular borrowers in any circumstance.

As lenders are commercial entities, each lender will determine its own credit appetite, policies and procedures for assessing credit applications from borrowers, including borrowers that are in financial distress.

Your lender is required to engage with you– in line with the Consumer Protection Code and the Code of Conduct on Mortgage Arrears – to aim to deliver appropriate and sustainable solutions and facilitate as many borrowers as possible to return to repaying their debt.

If you are unhappy with the decision of your lender, you can appeal that decision to your lender’s appeals board. Your lender must provide you with a copy of its MARP booklet, which explains how you can lodge an appeal.

If you are not satisfied with the Appeals Board decision, you have a right to refer the matter to the Financial Services and Pensions Ombudsman (FSPO). You lender must advise you of this right, and must also provide you with the contact details of the Ombudsman.

Your lender may classify you as “not co-operating” if:

• You fail to make a full and honest disclosure of information to your lender that would have a significant impact on your financial situation.
• You fail to provide information, relevant to your financial situation, within the timeline required by the lender.
• You have not entered into an alternative repayment arrangement within three months, and during this time you have failed to meet your mortgage repayments in full in accordance with the mortgage contract; or you meet your mortgage repayments in full in accordance with your mortgage contract but have an arrears balance remaining on your mortgage.
• You have entered into an alternative repayment arrangement but during the following three months, you have failed to meet in full repayments as specified in the terms of your alternative repayment arrangement and have failed to make contact with, or respond to any communications from your lender or a third party acting on your lender’s behalf or
• Have engaged in such a way that does not enable your lender to complete an assessment of your circumstances.

The implications of being classified as not cooperating are serious. Being classified as not cooperating means that your lender may commence legal proceedings to repossess your home (or property) immediately.

If you are classified as not co-operating by your lender, the Money Advice and Budgeting Service (MABS) may be able to advise you.

Your lender is restricted from imposing charges and/or surcharge interest on arrears arising on a mortgage account in arrears to which the Code of Conduct on Mortgage Arrears (CCMA) applies, unless you have been classified as “not co-operating.”

Your lender must have a dedicated section on its website for borrowers in, or concerned about, financial difficulties which must include information on the level of charges that may be imposed on borrowers who are not co-operating with the lender.

In addition, when arrears arise on a borrower’s mortgage loan account and remain outstanding 31 calendar days from the date the arrears arose, a lender must outline the implications for the borrower of not co-operating including the imposition of charges and/or surcharge interest on arrears arising on a mortgage account and details of such charges.

Under the Code of Conduct on Mortgage Arrears (CCMA), lenders have obligations to assist you as far as possible in dealing with your financial difficulties, taking into account your particular circumstances.

The steps a lender must follow prior to commencing repossession proceedings are outlined in the CCMA, and must be adhered to by lenders.

It’s in your interest to engage with your lender. If you are in arrears, and not co-operating with your lender, you are at an increased risk of having your property repossessed.

If you do not engage with your lender, your lender cannot assess your financial situation and cannot help you get back on track with your mortgage.

Your lender may commence legal proceedings for repossession of your home where you are in arrears but only where your lender has made every reasonable effort to agree an ARA with you and;

 

• You have been given at least eight months from the date your mortgage arrears arose, or three months from the date an alternative arrangement could not be agreed (whichever is later); or
• You have been classified as not cooperating under the CCMA and have been notified of this.

If you are this situation, the Money Advice and Budgeting Service (MABS) may be able to advise you.

The Central Credit Register (CCR) is a system for collecting personal and credit information on loans of €500 or more.

The CCR provides factual information, to lenders and borrowers, on a borrower’s credit history, including details of a borrower’s overall indebtedness and their payment track record, such as payments made and payments missed.

Lenders must report accurate, complete and up to date information to the CCR, and the Central Bank’s role is to match that information to create a credit report.

Lenders and borrowers can apply for credit reports.

Lenders use this information so that they can better understand a borrower’s overall financial position, which enables them assess a person’s ability to repay their current and proposed borrowings.

It is in the interests of lenders and borrowers that lenders provide credit in a manner that is responsible, and does not expose the lender or borrower to undue risk.

The CCR does not produce credit scores or a credit rating – it contains no guidance, recommendation or prohibition for lenders on what decision they should make on a borrowers credit application.

It is a matter for each lender to make their own lending decision in accordance with its own credit policies and risk appetite, subject to applicable law and regulatory requirements.

For more information and to apply for your credit report visit the Central Credit Register website.

Restructuring of your mortgage may assist you meet your financial obligations, including the full repayment of your mortgage into the future.

If you agree a restructure with your lender as a result of financial distress, for example an extension to the term of your loan to allow you make lower repayments, this will be reported to the Central Credit Register and included on your credit report.

If you want to add an explanatory statement to their credit report, to explain any entry that is on their credit record, you can do so at any time.

It is important to note that the Central Credit Register does not produce credit scores or credit ratings, nor does it contain guidance on what decision a lender should make on a borrower’s credit application.

It is a matter for each lender to make their own lending decision in accordance with their own credit policies and risk appetite, subject to applicable law and regulatory requirements.

Yes. If your lender sells your mortgage to another entity, the new legal owner must be regulated by the Central Bank of Ireland and you continue to be protected by the Code of Conduct on Mortgage Arrears (CCMA). Your rights under the CCMA, including the right of an internal appeal, do not change.  All of the information in this FAQ applies regardless of whether your mortgage is with a bank, retail credit firm or credit servicing firm.

The Mortgage to Rent (MTR) scheme is a government scheme to help homeowners who are at risk of losing their homes due to mortgage arrears. It lets homeowners in mortgage difficulty switch from owning their home to renting their home as social housing tenants. The scheme is overseen by the Department of Housing, Local Government and Heritage and is administered by the Housing Agency.

The MTR scheme is a social housing option only available if you are eligible for social housing support and your mortgage is unsustainable.

Under the scheme, you voluntarily surrender ownership of your home to your mortgage lender. You no longer own your home or have any financial interest in it, but you can continue to live there as a tenant of the local authority or approved housing body. You pay an affordable rent, which is based on your income.

If your financial situation improves, you have an option to buy your home back.

You can approach your lender and ask to be considered for MTR.

The Abhaile service can assist you with this.

The Financial Services and Pensions Ombudsman (FSPO) is an independent, impartial, fair and free service that helps resolve complaints with pension providers and regulated financial services providers.

Unlike the Central Bank, and in the case of mortgages, the FSPO has a legal ability and mandate to investigate and resolve individual borrower complaints against lenders.

If you find yourself struggling to pay your mortgage, speak to your lender as soon as possible and continue to talk to them throughout the process.

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An easy way to cut your monthly mortgage bill and save money is to switch to a cheaper one. A cheaper mortgage could be available from your existing lender or offered by a completely different lender which you could switch to.

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