Banks and Mabs collaborate over mortgage debt advice

Banking and Payment Federation Ireland (BPFI) chief executive Brian Hayes said that institutions 'are very aware that with the increased cost of living, as well as recent rises in interest rates, many households are coming under increased financial pressure'. File picture: BPFI

Irish banks are collaborating with the Government-funded Money Advice and Budgeting Service (Mabs) to launch a new website to help mortgaged households that are struggling with the sharp increases in interest rates since last summer. 

The Banking and Payments Federation Ireland (BPFI) — the industry group for AIB, Bank of Ireland, Permanent TSB, credit servicing firms, and other institutions — said it has set up  the website DealingWithDebt.ie as part of a "nationwide campaign for customers concerned about mortgage repayments due to cost-of-living pressures".

It comes after the European Central Bank started to hike interest rates almost a year ago. 

Mortgage brokers and debt advisers have warned that households are already struggling, adding that mortgage arrears will inevitably rise in the coming months.

They point out that Irish banks automatically pass on ECB rate increases for people holding tracker mortgage loans and say that costs for fixed-rate home loans will likely increase further this year to reflect official hikes made by the ECB. 

The ECB has doubled down on its pledge to fight inflation, with president Christine Lagarde signalling as recently as last week that the central bank will likely increase official rates again when it next meets on June 15. 

“BPFI member banks, non-banks, and credit servicing firms are very aware that with the increased cost of living, as well as recent rises in interest rates, many households are coming under increased financial pressure," said BPFI  chief executive Brian Hayes. 

"While members are not seeing any trends that would indicate a cause for concern in the numbers of arrears cases currently presenting, for those customers who are worried or struggling with their mortgage repayments, or indeed other payments such as personal loans, credit cards, or overdrafts, our one key message today is that the most important thing you can do is to contact your bank or financial services provider as soon as possible."