The Ryan Review

There was a question answered here recently about the Rebuilding Ireland Home Loan. This is the Government (aka taxpayer)-sponsored scheme to offer rock-bottom rate, 30-year mortgages to subprime borrowers. To qualify, they must have been rejected from three mainstream banks and not earn over €50,000.

The scheme is now in abeyance given its success (the money was hoovered up very quickly, with half of it going to one-off rural houses instead of hard-pressed urban buyers, but that was virtually inevitable from the start).

The catch is in the add-on. Borrowers were forced to take out insurance using the Local Authorities’ own insurer rather than shop around in the market like everyone else. Worse still, they had to take it out at inflated premiums with additional disability cover, which isn’t required by ordinary banks. This made it not just unaffordable for many, but as I later heard from readers, it prohibited them from drawing down the funds altogether. One lady, who was refused the disability insurance but qualified for the life cover, couldn’t go ahead despite fully meeting the criteria that would have satisfied a bank. The council insisted the exact same terms apply, but there isn’t actually an insurer in Ireland who sells such policies. She was directed to a UK firm.

The added insurance is to protect the Council, not the borrower. But it’s another example of a lack of joined-up thinking. A creative and popular scheme let down by over-zealous bean counters on a coveryour-backside mission.