Procedure for offering a split mortgage

Brendan Burgess

Brendan Burgess

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I have been helping someone who was told by Bank of Ireland that they would be given a split mortgage provided that they can show that they can meet the repayments for the next 6 months.

But the letter issued is only for 6 months. There is no mention of what happens at the end of the 6 months.

Is this normal practice? I was expecting an offer of a split mortgage starting in 6 months time subject to meeting the repayments.
 
Usually, the bank issues a full letter stating the start date, interest rate, active amount and parked amount with no specific timeline.
The small print will say the bank will do a review of the agreement on a three yearly(sometimes yearly) basis with the option to move, depending on circumstances, credit from the warehoused amount to the active amount and vice-versa.

The repayments on the active part might be a lot more than interest only/rescheduled payments they have up until now being paying.
A 6 month only split is very strange as why not just offer a moratorium/rescheduled arrangement instead. The suspicious part of me wonders if this 6 month split could be used to inform the central bank/banking enquiry that the bank in question is fully participating in addressing mortgages in arrears by offering "long term" solutions, with 6 months being the long-term.

May be an old fashioned misprint or, the review time is an ultra short 6 months, as the debtors might have informed the bank that their circumstances might change for the better really soon?
 
Hi punk

This letter makes no mention of a split mortgage. It just shows a reduced payment for 6 months.

Brendan
 
'Told' they have a split, kind of strange. As with most verbal agreements, they should write to the bank including the details from the conversation where the split was mentioned, by whom,when etc.and ask for the start date to be brought forward to now, especially if the servicing of the active part is sustainable to them and advantageous compared to alternanatives.
 
Hi punk

It seems to be practice to make sure that the borrower is able to keep up the payments for 6 months. That is reasonable.

But I would just like to be sure that if they pay their mortgage payments for 6 months, then they will get a split, and details of the split will be in writing.
 
Here is the wording of a ptsb offer of a split mortgage

I can confirm that ptsb has approved you for a split mortgage.

If you accept this offer

You will be placed on a temporary moratorium arrangement for 6 months at the prevailing mortgage rate. The bank will set your monthly repayment to €x

Assuming all payments are met in full and on time throughout the temporary arrangement , your mortgage balance will be split into two accounts, etc.
Click to expand...

This is what I would expect all split mortgage offers to be like.
 
Maybe I am not making my point clearly.

ptsb's offer was a detailed split mortgage , taking effect after 6 months of proving that they can meet their repayments.

The BoI offer was for a reduced payment for 6 months, with no mention of a split mortgage.

Has anyone got a letter of a split from Bank of Ireland detailing the split?
 
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