Has the ISI defined what a sustainable mortgage is?

Brendan Burgess

Brendan Burgess

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Here is an extract of the information from [broken link removed]

Value of home|€250,000
Mortgage|€300,000
Mortgage per month|€2,222
John is an IT consultant who earns a monthly net income of €3,510

5. P O T E N T IA L P IA S O L U T I O N FO R J O H N P R O P O S E D B Y P I P

The PIP identifies €1,821 as the long-term sustainable monthly repayment on John’s PPR mortgage. To achieve this, the PIP proposes a term extension of five years. The term of the John’s mortgage cannot be extended further due to John’s age.
Click to expand...
The interest on John's mortgage is €1,125 per month. That is all John should be paying for the duration of the PIA.

He will be paying €8,500 a year towards buying his house, while his unsecured creditors of €100,000 are taking a 90% haircut??

This is madness. The unsecured creditors should object strongly to this arrangement. They should at least get the €8,500 per year for 6 years which would give them a 50% haircut.
 
there is a lot to take in on all the examples,what i perceive in this one , is that the {shortfall ie negative equity on the Mortgage} is not being treated as effectively an (unsecured loan) .Surely the {negative equity elements should be treated as part of unsecured loans ?ie add the k50 onto unsecured. Would this not give more fairness on the overall (shortfall)
Hope my comment makes sense.
 
Johns repayments

Brendan, I dont see why John should only have interest only payments on his home it has already been increased time wise .Are you proposing the bank should take a bigger hit on mortgage side to pay creditors or that John carries more burden.
 
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