ILP subsidiary to stop issuing mortgages

Irish Life & Permanent subsidiary Springboard Mortgages is to stop issuing new mortgages from today.

Springboard offered loans to people unable to secure a conventional mortgage and charges higher interest rates.

The decision to stop lending will have no impact on existing customers, the company said.

No more applications for mortgages will be accepted after close of business today while all lending will cease from June 30th.

Springboard has a loan book of €500 million and said approximately two-thirds of its loans are tracker mortgages, although at a premium of approximately 1.5 per cent over standard tracker products.

Springboard chief executive Shane O’Sullivan said in a statement the decision to stop lending reflected Irish Life’s focus on mainstream lending.

“The Springboard business model worked very effectively and profitably but in a market where funding has become more expensive and more scarce, the group has made the decision to concentrate its mortgage lending activities on its traditional core market and we respect that,” he said.

A spokesman said Irish Life and Permanent had decided to concentrate on business generated through its mortgage lending division, Permanent TSB.

Springboard is a wholly owned subsidiary of Irish Life & Permanent, established in December 2006 as a joint venture with US investment giant Merrill Lynch.

It took sole ownership in June 2008 when Merrill Lynch left the specialist lending market.