Irish Mortgage Payment Breaks – Extensions and Expirations

Jane Kelly, Paul Lyons, Eoghan O'Brien and Jonathan Rice
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Paul Lyons: Central Bank of Ireland
Eoghan O'Brien: Central Bank of Ireland

No 7/FS/21, Financial Stability Notes from Central Bank of Ireland

Abstract: In response to the COVID-19 pandemic, credit institutions in Ireland provided payment breaks to alleviate borrower’s short-term liquidity constraints. Some borrowers received just one payment break, while others received an extension to their original payment break. The differentiating characteristics of these borrower groups, along with the financial position of those who required further support upon expiration of their payment break, is the focus of this Note. Borrowers with a payment break extension were more likely to have existing or historic forbearance measures in place, were less likely to be in long-term arrears (>1 year) and were more likely to have had their employment prospects negatively affected by the pandemic. The Note further identifies the cohort of borrowers that required a restructuring solution following the expiration of their payment break. Reduced monthly repayments or deferred payment options were the preferred restructuring types offered to the cohort of borrowers upon expiry of their payment break.

Date: 2021-07
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