Mortgage payment-break numbers rise to 78,000

Banking and Payments Federation Ireland (BPFI) said 78,000 mortgage payment breaks have been granted by Irish lenders as a result of the Covid-19 crisis, representing a 20 per cent increase in less than a month.

A total of 140,000 mortgage, personal and business loans are now subject to temporary payment pauses of three months, BPFI said as it urged distressed borrowers to avail of breaks ahead of a June 30th deadline the European Banking Authority had set for banks to process such measures. Lenders agreed at the end of April to extend initial three-month breaks to a maximum of six months.

The Irish Times reported on Wednesday that the State’s banks are beginning to write to borrowers who have availed of payment, asking those who feel they will not be able to return regular payments after a six-month pause to engage on finding longer-term solutions.

The initiative is aimed at avoiding a cliff-edge effect at the end of September, when standard extended payment breaks are due to run out, and pre-empting a potential fresh arrears crisis.

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BPFI is publishing an extensive guide to payment breaks on its website on Thursday.

"With the initial three-month payment breaks issued in mid-March, lenders are now undertaking a significant process of engagement with those who have availed of a break and those customers are now being contacted about their options once the current payment break ends," said BPFI chief executive Brian Hayes.