Banks to extend mortgage breaks to homeowners

Banks to extend mortgage breaks to homeowners

The country’s five retail banks are likely to extend a six-month break on loan repayments so that they can help homeowners cope with financial difficulty caused by the coronavirus. This will be a shift from a three-month mortgage break that borrowers had been given by the banks before the COVID-19 impact.
According to the Banking and Payments Federation Ireland (BPFI), banks were in the final stages of completing 45,000 mortgage breaks. Out of the applicants for mortgage breaks, one-in-eight borrowers had previously restructured loan repayments owing to the financial crisis ten years ago. Also, 14,000 breaks and $ 3,200 working capital facilities for SMEs have been set aside to help businesses.
The five Irish banks are in discussion with the regulator, the Irish Central Bank so that they can come up with a regulatory framework. These regulations will help banks manage the extended loan repayments offered to homeowners because mortgage costs are likely to increase.
As a result of the COVID-19 impact and the extended loan repayments, it is expected that some loans will perform badly and losses are likely to occur across all sectors.
To lessen the impact of the coronavirus, banks are in the process of completing mortgage breaks for homeowners and SMEs. They’re working hand in hand with the Irish Central Bank so that they can formulate a regulatory framework to manage the new loan repayment facility. Click here for more information.