Tracker mortgage funding deal before March possible

An agreement on funding tracker mortgages held by Irish banks through the ESM could be in place before the EU-wide stress tests scheduled for next March, according to an EU source.

The troika has been working with the Government over the past two years in an effort to find a solution to tracker mortgages, which are putting a huge block on the sector’s return to profitability.

Permanent TSB has a €15bn tracker mortgage book. Bank of Ireland and AIB have tracker mortgage books in excess of €17bn each. With interest rates at historically low levels, the returns on these products are lower than the cost of funding, which burns a huge amount of capital every year.