Could the new AIB split mortgage be illegal?

In the Sunday Business Post yesterday an article appeared which explained the new AIB split mortgage deal. We sought details of this from AIB but only scant ones were provided which we posted already.

How it works in money terms was not disclosed by AIB but they equally didn’t retract any statements showing up in the press so we can assume that the information published is correct as they haven’t publicly retracted any aspect of how it has been covered. For that reason there was an aspect to this which we see as being of grave concern.

However, if Mary and Tom get a pension lump sum at retirement, they must use this towards paying down tranche B. This only applies to pension lump sums and doesn’t apply to any other lump sums a person may receive e.g. inheritance, bonus payments, gifts, lotto win etc. On this matter it is always advisable to seek professional pension advice.

Read the highlighted parts again, ‘they must use’ the lump sum …

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Details of the new AIB debt write-down scheme

The information available at present is limited and the only thing we were able to obtain in terms of hard fact is that people on trackers won’t lose their tracker in this process.

Background info:   This is a variant of our split product and it can provide for upfront partial compromise of principle debt and a right sizing of the loan. It will contain features that incentivise and reward repayment of the loan B in advance of maturity.  It will also provide an opportunity for the customer to earn a ‘reward’ in the form of principle debt reduction if they keep to the terms of their A loan.     There is security of tenure built in as a feature for as soon as the borrower lives in the property.   Key details:     This is not a self-selected product. It will suit a certain, limited cohort of borrowers for which standard forbearance does not work. If standard forbearance works it will not be offered.  This split represents a final attempt to keep people in their homes where there is …

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