Minister for Finance Michael McGrath has welcomed a court ruling, which resulted in a finance services company being forced to lower the rate of a mortgage owed by a distressed borrower.
As reported by the Irish Independent, the action involved a couple who had got into financial difficulty and were refused a fixed-rate mortgage by Pepper Finance.
The court ruled the fixed-rate should be granted, despite the company stating it does not offer fixed rates.
According to The Irish Times, Judge Mary O’Malley Costello at Tullamore Circuit Court last week approved a Personal Insolvency Arrangement (PIA) for the couple, which will see a fixed rate of 2.5 per cent applied to their mortgage over 25 years.
Pepper Finance had opposed the deal, claiming it could not offer a fixed rate at that level for that length of time.
The ruling has since been welcomed by campaigners, who said it will give hope to over 30,000 homeowners with distressed mortgages.
Commenting on the court’s decision on Tuesday, Mr McGrath said: “I welcome the judgment. I believe that loan-owners and mortgage providers should be offering fixed-rate options. This is an issue I have raised directly with [finance companies] and also with the Central Banks.
“At present, under the code of conduct on mortgage arrears, the lenders are only required to consider the alternative payment arrangements from the suite of options they offer.”