The Mortgage to Rent scheme, which was initiated by Clúid, aims to help some people who have serious difficulties with their mortgage and who are unlikely ever to make full repayments on their mortgage in the future. Under the scheme, the home is bought by a housing association such as Clúid and the family stays in their home as a tenant, paying an affordable rent to the housing association, rather than as an owner occupier with a mortgage.
Mortgage to Rent involves the following:
- The family’s house or apartment is sold to a housing association.
- The family continue to live in their present home, but as a tenant of the housing association instead of as an owner occupier.
- The household pays rent to the housing association. This is based on their income and will continue to be affordable into the future. The lower the income, the less rent they pay.
- The family will make a separate agreement with their lender on any outstanding debt following the sale of the house or apartment.
What are the advantages?
- The family continues to live in their present home and will be able to stay there for as long as they want so long as they pay their rent and comply with the tenancy agreement.
- They will no longer have to worry about the lender repossessing their home.
- The rent they pay will be affordable.
- Their neighbours will only know that they are in the Mortgage to Rent scheme if they choose to tell them.
- The family will receive a contribution towards the legal costs.
What are the disadvantages?
- The family will no longer be the owner of their home, so for example, they won’t be able to carry out improvements without the housing associations permission.
Although it is not a panacea for the small proportion of people in desperate need, it can dramatically transform their lives. There are several thousand households whose home ownership has become a financial millstone and a source of great anxiety rather than a means of achieving independence and wealth. For some of them, Mortgage-to-Rent will enable them to stay in their home without the threat of repossession hanging over them, paying an affordable rent instead of an unaffordable mortgage.
If you are interested and think you might qualify for Mortgage to Rent, you must first contact your lender who will decide whether or not your mortgage is unsustainable. If your mortgage is considered unsustainable then your lender will help you with the next steps.
For more information download the Department of Environment, Community and Local Government's information leaflet here.
The Citizens Information Board is operating a Mortgage Arrears Information Helpline for potential applicants to the Scheme. The service is available between the hours of 9.30am to 5pm on 076 107 4050 and provides general information to potential applicants. You can also obtain information on their website www.keepingyourhome.ie.