# You can now extend your mortgage until you are 90!



## odyssey06 (13 May 2021)

Different case? ... PIA approved to age 90








						Judge approves PIA that will see woman (54) making mortgage repayments until she is 90
					

It is being regarded as an important test case in the area of personal insolvency.




					www.thejournal.ie


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## elcato (13 May 2021)

> PIA approved to age 90


That is a good and fair outcome though. She can live in it as long as she is alive and the house is sold and proceeds are to pay off loan on her death. I suppose the burning question will be inflation and how long she lives for. It's kind of like a life loan with no interest from what I can see.

Although if she clicks down in coppers it could get complicated


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## RedOnion (13 May 2021)

elcato said:


> It's kind of like a life loan with no interest from what I can see.


No. She will pay interest only, no principal. Looks to be c.3.1%.


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## Jim Stafford (14 May 2021)

Court ruling could help up to 20,000 people in Celtic Tiger-era debt
					

Court permits 54-year-old woman to keep paying mortgage until she is 90




					www.irishtimes.com
				




Ground breaking judgment now allows people to extend their home mortgage until they are 90. Mr Justice Sanfey described the solution as “an exemplary illustration” of how the insolvency system should work, while recognising the unusual long-term nature of the proposal.

Credit should  be given to Start Mortgages DAC who supported the PIA.

The big question is: Would the High Court have approved the PIA if Start had not supported it?

Jim Stafford


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## Steven Barrett (14 May 2021)

Read that this morning Jim. It should be used sparingly though. There is usually a drop in income when people retire, so debt then takes up a larger percentage of a persons income. Being obligated to a bank for basically the rest of a persons life is not a good situation to be in. I can imagine the Joe Duffy shows now..."my mum is still paying her mortgage at 85. We didn't think we'd have to pay it for that long, even though we signed up to an agreement for payments to age 90. We thought they'd let her off at some stage."

I see that in this case, they didn't really have much of an option and that is when it should be used. It should be a last resort.


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## demoivre (14 May 2021)

Last year a  62 year old Meath builder got a 30 year interest only ( Tracker at 0.8% ! ) mortgage as part of a PIA  so I'm not sure why this case is receiving so much attention.


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## ClubMan (14 May 2021)

I'm looking forward the courts letting me live alone in my three bed house until I'm 90 if I end up not being able to afford it in the next few years. 
Nice country we live in...


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## Brendan Burgess (14 May 2021)

Forget PIAs for the moment.

There is nothing wrong with an interest only mortgage at market rates for an indefinite period.

If a 65 year old has a mortgage of €100k at 3% on a house worth €300k, the bank should be happy to switch the mortgage to interest only until the person dies or sells the house.

That is a very profitable loan for the bank. Why would they want it repaid earlier?  They will just have to find a new customer to lend it to.

That is why you have life loans.  Seniors Money will provide a loan and roll up the interest until the person dies.

But the stupid Central  Bank rules say that a  mortgage is not performing if it is not repaid by the original scheduled date and so the banks have to allocate more capital to it.  It becomes very expensive to provide such a loan.

There is absolutely no law that someone in retirement can't rent a property for the remainder of their life. Why should there be a ban on them renting money for the rest of their life?


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## Brendan Burgess (14 May 2021)

Now look at PIAs 

It's outrageous that the Court could impose a PIA at a cheap mortgage rate for a long term.   

If they wanted to impose an interest-only indefinite term mortgage on a lender, they could do so at the market rate or set a rate such as ECB +3%. 

And of course, many of these borrowers will continue to play the system. They will pay nothing anyway, and it will be impossible and/or very expensive for the lender to do anything about it. 

It is part of the reason why we have the highest mortgage rates in the eurozone. Everyone else is paying for the court's generosity towards these borrowers.

Brendan


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## demoivre (14 May 2021)

Brendan Burgess said:


> Now look at PIAs
> 
> It's outrageous that the Court could impose a PIA at a cheap mortgage rate for a long term.



Why is it outrageous if the creditor would be worse off if the debtor went bankrupt ?


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## Brendan Burgess (14 May 2021)

Because it should not be up to the PIP or the court to decide who is better off.

If the borrower is in deep default, the lender should have the choice of enforcing its security.

Brendan


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## Thirsty (14 May 2021)

demoivre said:


> Last year a  62 year old Meath builder got a 30 year interest only ( Tracker at 0.8% ! ) mortgage as part of a PIA  so I'm not sure why this case is receiving so much attention.


Do you have link to report?


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## DK123 (15 May 2021)

I would to see this report also.


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## Thirsty (15 May 2021)

@DK123 - I've no idea what you are agreeing with. I asked a poster if they had a link to this story.


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## demoivre (17 May 2021)

Thirsty said:


> Do you have link to report?











						Meath builder has €1.6 million of debt written off
					

Court approves personal insolvency case that keeps former developer in family home




					www.irishtimes.com


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## demoivre (17 May 2021)

Brendan Burgess said:


> Because it should not be up to the PIA or the court to decide who is better off.
> 
> If the borrower is in deep default, the lender should have the choice of enforcing its security.
> 
> Brendan



It makes no sense to me that a bank who would be worse off by enforcing it's security should be allowed to do so.

Plenty of deep arrears mortgages and in negative equity out there could still be sorted out at a rate of 2% IO over a very extended period. In Ireland if you're in deep arrears you get charged about 4.25% and on an annuity basis and they want you to have it paid off by aged about 70. The most powerful man in the world rocked up to his new job aged 78.

The rationale of the banks here is akin to a weightlifter who fails three times at 200kg then being asked to have a go at 400kg !


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## Jim Stafford (17 May 2021)

I set out below a link to the judgment itself:



			https://www.courts.ie/acc/alfresco/e43b12e5-39a4-434e-931a-027023c0ac92/2021_IEHC_327.pdf/pdf#view=fitH
		


Jim Stafford


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## DK123 (17 May 2021)

I agree with demoivre big time.!!


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## Brendan Burgess (17 May 2021)

demoivre said:


> In Ireland if you're in deep arrears you get charged about 4.25% and on an annuity basis



Where are you getting this from? 

And what does "an annuity basis" mean in this context? It means nothing if the person is paying nothing. 

Banks will not lend if they can't enforce their security. The courts should not second guess the credit decisions of lenders  and certainly should not set the interest rates. 

Brendan


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## peemac (18 May 2021)

ClubMan said:


> I'm looking forward the courts letting me live alone in my three bed house until I'm 90 if I end up not being able to afford it in the next few years.
> Nice country we live in...


Actually it is doing you a favour.

There is no chance this lady could afford private rental without HAP. The other alternative is social housing on a pittance rent.

Both of these options are paid for in taxation at some point.

However instead of it costing your council, start will get 3% pa and will get their capital back at some point and there might be a few bob left.


Good to see this happening, but where there are children, then just like the life loans, they need to know that they come second in the queue when the house is sold


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## NoRegretsCoyote (19 May 2021)

peemac said:


> start will get 3% pa and will get their capital back at some point and there might be a few bob left.


Am not convinced. These kind of loans are more likely to fall back into arrears again. Also huge uncertainty about when it will be repaid. 

Will 3% cover Start's cost of capital for an open-ended loan?


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## PIPPOP (19 May 2021)

NoRegretsCoyote said:


> Am not convinced. These kind of loans are more likely to fall back into arrears again. Also huge uncertainty about when it will be repaid.
> 
> Will 3% cover Start's cost of capital for an open-ended loan?


how is it likely if the person is on such a low mortgage payment that has been calculated based on their income levels which should not change. Its not open ended, it has a term. Whether its repaid if the pass way prior to the term ending, or on the term ending doesnt really matter. If it comes to term ending the lender at its discretion can extend the arrangement if they wish. Entering a PIA is fairly onerous task and there are plenty of terms/conditions to prevent abuse, so I dont see this becoming a free for all. Its a solution that depends on plenty of variables.


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## demoivre (25 May 2021)

Brendan Burgess said:


> Where are you getting this from?
> 
> And what does "an annuity basis" mean in this context? It means nothing if the person is paying nothing.
> 
> ...



The highest rates are regularly charged to those in the most trouble ie deep arrears and significant negative equity.  

A low interest only mortgage, to extend past life expectancy, may well be sustainable, and in some of the cases I've seen no write down of principal would be needed.

Banks' are too limited in the restructures they offer imo.

Thankfully many judges considering PIA applications don't share your view about courts setting interest rates in problem cases.


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## Shirazman (27 Oct 2021)

I'll see your 90 and raise you to 99!









						Woman to pay mortgage until she is 99 after reaching deal to extend term
					

A court has approved a personal insolvency arrangement (PIA) which will allow a 57-year-old woman make mortgage repayments on her home until she reaches the age of 99.




					www.independent.ie
				




_A court has approved a personal insolvency arrangement (PIA) which will allow a 57-year-old woman make mortgage repayments on her home until she reaches the age of 99.   The decision is one of a number of recent rulings where arrangements extending mortgages far beyond normal life expectancy have been approved in circumstances where there is no other workable way of keeping a debtor in their home.

Under the PIA approved by Circuit Court Judge Mary Enright, Dubliner Belinda Kane will have the term of her mortgage extended to 504 months.
The term extension allows for more manageable mortgage payments.   Should she die before the end of the mortgage term, the remainder of the mortgage will be paid from her estate.   The arrangement had been objected to by her lender Permanent TSB._

Probably only a matter of time until a PIA to age 100 is reached!   And, of course, when one turns 100, one gets a nice tax-free gift cheque for €2,540 from the President!    That could be used to mop up any arrears!


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