Owners may gain access to money tied up in homes

Owners will get easy access to money tied up in their homes under a revolutionary new mortgage product. Permanent tsb's OnePlan will allow customers access up to 75 per cent of the value of their properties through a cheque-book account.

The bank will transfer up to three-quarters of the value of a home - minus any outstanding mortgage - to a "holding account", from where the customer is free to spend it on anything without the hassle of outlining plans for the money in a traditional remortgaging format.

The only restrictions are that the money can not be spent on business expenses and withdrawals from the account must be for a minimum of €3,000.

While the money is in the holding account, no interest is charged. Once it is withdrawn, the customer will pay interest at the standard variable mortgage rate. The money can be borrowed over any term between five and 25 years and not necessarily the same term as the mortgage.

Permanent tsb's head of marketing, Mr Niall O'Grady, said there was currently an estimated €75 billion in untapped equity in the State's residential property market, while 5 per cent of the 500,000 mortgage-holders remortgage every year.The new product is likely put pressure on other lenders in the Republic to provide access to funds at greatly reduced interest rates.

However, it has drawn criticism from the State's biggest housing charity, Threshold, which has urged home owners to be cautious in a period of economic uncertainty. Director Mr Kieran Murphy said: "Home owners should make sure they can meet repayments on extra borrowings."

If a mortgage is in the name of two people, the consent of both parties will be required while setting up the holding account. However, once the account is in place one party can write and draw on cheques without the other party's knowledge or consent.

The scheme means home owners can access pre-approved pools of money up to hundreds of thousands of euro at substantially less than the normal interest paid on conventional loans.