Law on home loans in force

An EU directive aiming to boost protections and opening up choice in buying a mortgage outside national boundaries has been transposed into Irish law, the Department of Finance said yesterday.

Law on home loans in force

However, leading mortgage expert Michael Dowling said it will be many years before the law will have much practical effect — allowing an Irish citizen to buy a home loan from a lender based elsewhere in the EU.

The department said the new law bolsters existing consumer protections for home buyers under the Consumer Credit Act and the Irish Central Bank’s consumer protection and mortgage arrears codes.

“This is an important piece of law which is now in force and which will provide a more accessible mortgage market and a high level of consumer protection,” Finance Minister Michael Noonan said.

“The overall objective of the Mortgage Credit Directive (MCD) is to open up a European market for mortgages with common minimum standards.

"This includes the provision of standardised information and common standards for brokers and mortgage providers across the EU,” he said.

However, Mr Dowling, the chair of the Irish Brokers’ Association mortgage committee, said an EU-wide market for home loans will be a long time coming.

“It will be a number of years before a person in Ireland can go directly to, say, Santander in Spain or another lender in the EU.

"There are still legal differences in terms of a bank registering a mortgage and it will be some time before this become a reality,” he said.

Similarly, few Irish people get life insurance from another EU insurance company outside the country, Mr Dowling said.

The department said “the purpose of the MCD is to develop a more transparent, efficient and competitive internal market”.

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