We all pay the price for mortgage arrears
ALARGE number of people in recent years have found themselves struggling to keep up with their mortgage repayments. For many, lifestyle sacrifices are the only answer as they try to balance the household books in a way that accommodates their priorities.
To pay the mortgage and keep a roof over their family’s heads, while also dealing with childcare costs, are, therefore, the essential focus for most people.
It is an unfortunate situation, of course, for those who find themselves in long-term arrears, refusing to engage with financial institutions and unable to confront their financial obligations.
Yet the reality of this cannot be ignored, for it is those in long-term arrears who are actually costing everybody else more money. Those paying what they owe are effectively subsidising those who are burying their heads in the sand in the hope that the problem will find a miraculous solution.
Meanwhile, those entering the market are being confronted with difficulties as a result, and through no fault of their own. At the same time, competition is being stymied because other banks with an eye to the mortgage market are reluctant to set up shop here. For why would you do business in a country where loan agreements are not worth the paper they are written on?
The last thing that anyone wants to see is a rise in repossessions and families losing their homes. Nonetheless, it is important to recognise that when long-term arrears are not properly addressed, it is other ordinary families who suffer – with higher mortgage rates and lack of financial choice.
It is understandable that people who find themselves trapped in an ongoing cycle of arrears might refuse to engage with the problem. But it is a problem that won’t fix itself, and an issue that is not going to magically disappear.
It is not a popular topic on which to take a stand, but Finance Minister Pascal Donohoe is nevertheless correct to point out that some borrowers are actually imposing a cost on others. It is an issue that requires attention and demands to be addressed.