Mortgage splitting solution being scuppered by banks

Rabidlamb

That's my title, not the Indo's, full story here
http://www.independent.ie/business/personal-finance/property-mortgages/mortgages-will-be-split-in-two-for-struggling-homeowners-3145655.html

The Irish Independent has learnt that 'split' mortgages are to be offered by most major banks, allowing part of the mortgage to be 'parked'.

Some banks are planning to apply the same interest rate to the parked part of the mortgage as that applied to the original mortgage.

Other banks are to apply a discounted interest rate to the parked part.

Either way, this would not reduce monthly repayments by as much as had originally been hoped.

For example, a family with a €300,000 mortgage on a 3pc interest rate may be unable to meet monthly repayments of €1,400.

They may seek to benefit from a split mortgage and have half the capital owed put aside for a few years.

If the banks had agreed to apply no interest to the part of the mortgage that was parked, this could reduce monthly repayments to around €700.

But if they were charged interest on the part that was parked, the repayments would be more like €1,000.

If I was on the edge of deciding between soldiering on or just giving up making repayments this would have made my mind up.
There was a very real & workable solution here & the banks have ****ted all over it from a height.
I can only see this increasing strategic defaults as customers learn of the punitive offers open to them.
Why anyone who knows they'll never be able to repay their mortgages gives the bank a penny more is beyond me.
Enter the resolution process, live rent free for 4 or 5 years, save a few quid.
The banks wont play fair, why should the customers.

OnlyWayIsUp

Rabidlamb wrote: »

That's my title, not the Indo's, full story here
http://www.independent.ie/business/personal-finance/property-mortgages/mortgages-will-be-split-in-two-for-struggling-homeowners-3145655.html





If I was on the edge of deciding between soldiering on or just giving up making repayments this would have made my mind up.
There was a very real & workable solution here & the banks have ****ted all over it from a height.
I can only see this increasing strategic defaults as customers learn of the punitive offers open to them.
Why anyone who knows they'll never be able to repay their mortgages gives the bank a penny more is beyond me.
Enter the resolution process, live rent free for 4 or 5 years, save a few quid.
The banks wont play fair, why should the customers.

This "splitting" sounds like a good idea.

Zamboni

Deckchairs, Titanic etc.