New Interest Rate Cut Option for Homeowners in arrears says AIB


The state-owned AIB has announced that they will be launching a new option for homeowners in arrears that will see the interest rate they pay slashed. For example; a family with a current mortgage loan of €200,000 mortgage with a variable rate of 4.5pc could see their mortgage monthly repayments drop by as much €400 under the plan.

This move will see those families in financial trouble offered the option of having the interest rate cut as low as 0.5pc. It has been mentioned that the new product is to be unveiled before the summer and will apply to those on tracker and variable rate mortgages.

One in Ten of the mortgage customers at AIB, and its subsidiaries EBS and Haven mortgages are behind on their residential home loan payments.

The bank had no comment when interviewed, but it is understood the new product for those in arrears will the see the bank and it’s subsidiaries offering interest rates of between 0.5pc and 2.5pc. The bank will decide which of the homeowners behind on their payments are to be offered the super-low interest rate.

Ulster Bank has a similar 0.5pc interest rate product for it’s customers that are currently in mortgage arrears. AIB plan to apply this new product to those on tracker mortgages also, even those these are among the cheapest mortgages already. Most homeowners on trackers are currently paying around 1.5pc.

The bank already offers mortgage repayment holidays and split mortgages, which see part of the principal owned put to one side or warehoused for a number of years, with no payments made on it and no interest incurred on this portion of the debt.

AIB has recently been writing off debts for a select number of homeowners who were offered split mortgages. Last week it emerged that a family in Cork got €195,000 written off their mortgage. AIB and its subsidiaries have now agreed 100 deals with mortgage holders which have involved some form of debt write off, according to the organisation which has negotiated the deals. The family in Cork has been told by EBS it will forgive €195,000 of the mortgage borrowings, and now seek repayments on less than half of the money owed.