Bank of Ireland COVID-19 mortgage supports

Frequently Asked Questions

 
  • 1. How do I apply for a mortgage payment break?

    To request a payment break, or to ask to extend your payment break from 3 months to 6 months, complete the application form online at boi.com/paymentbreak, text “mortgage” to 50365 and we’ll send you a link, or call our Customer Relationship Team on 01 611 3333 (lines open 9am to 5:30pm, Monday to Friday).

    Closing date for applying for your first COVID-19 payment break is 30 September 2020.

  • 2. Can I apply to extend the term (duration) of my mortgage?

    Yes. If you have had a 3 month payment break applied to your mortgage loan and wish to apply to extend your mortgage term by 3 months, or if you’ve had a 6 month payment break and you wish to apply to extend your mortgage term by 6 months, you can do so by completing the Call Back form on our website at boi.com/paymentbreak. One of our agents will go through the detail with you over the phone and give you all the information you need.

    This option may be suitable for you if you normally pay full capital and interest repayments and you want to keep your regular repayments closer to the level they were before your COVID-19 payment break.

    IMPORTANT NOTES ABOUT EXTENDING YOUR MORTGAGE TERM:

    If you extend the term of your mortgage loan, while your repayments will be closer to the level they were before your COVID-19 payment break, it’s important to understand the implications of this – our agents will be able to explain this to you over the phone – i.e.

    • You will end up paying more in interest over the life of your loan;
    • The new end date of your mortgage loan may not align with your planned retirement date;

    • There could be implications for your life cover and you may need to review it with your life policy provider.

  • 3. Am I eligible for a 3 month payment break or an extended 6 month payment break on my mortgage?

    Payment breaks are available to holders of both Private Dwelling Home and Buy-to-Let mortgages who meet the following criteria. However, if you don’t meet these criteria, we may still be able to help you – complete the online application form and one of our agents will call you to discuss your application.

    Payment Break criteria

    • This is a precautionary1 request (your income hasn’t reduced but you want a safety net) OR it reflects a temporary reduction in your income which has occurred as a result of the current health crisis;
    • You were not concerned about your ability to meet your repayments prior to COVID-19;
    • You are not in a forbearance arrangement with Bank of Ireland or, if you are, you have met all the terms and conditions for a minimum of 12 months;
    • You were not in arrears prior to March 2020 on any mortgage account or other Bank of Ireland loan.
    • Your mortgage loan was approved or drawn down prior to 17 March 2020
    • 1. If you are considering a ‘precautionary’ payment break due to the potential impact of COVID-19, use our calculator at boi.com/paymentbreak to get an indication of what this will mean for your mortgage. Your balance will be higher at the end of the payment break, your subsequent repayments will increase and you will pay more interest, so you should only apply for a payment break if you are satisfied you need one.

      Applications are subject to approval. Qualifying criteria and terms and conditions apply

  • 4. Will taking a payment break mean I end up paying more interest?

    Yes. You are not required to make capital or interest repayments during a payment break but interest continues to be applied to the loan during it. This means the amount you owe will be higher after the payment break. And because the maturity date doesn’t change, your repayments after the payment break will be higher in order to repay the mortgage by the end of its agreed term (the duration of the loan).

    Under question 5, you can see some worked examples showing the implications of a payment break. You can also use the payment break calculator at boi.com/paymentbreak to get an indication of what this will mean for your mortgage loan.

    If you feel confident you can afford to make some partial or full mortgage repayments during the payment break period, you should strongly consider doing this. Paying down your loan as soon as you can will reduce the amount of interest you will pay over the life of your mortgage, while options such as extending your payment break or extending the term of your loan will cost you more in interest. Call us on 01 611 3333 to discuss this.

  • 5. What impact will a payment break have on my mortgage balance?

    Here are some worked examples based on a mortgage with €100,000 owing, on a rate of 3.0%, and remaining terms between 10 and 30 years.

    Term remaining before maturity 10 Years 15 Years 20 Years 25 Years 30 Years
    Amount owing on the mortgage loan €100,000 €100,000 €100,000 €100,000 €100,000
    Interest rate 3% 3% 3% 3% 3%
    Current monthly repayments at this rate €965 €690 €554 €474 €421
    Total amount to repay with no payment break €115,832 €124,240 €133,014 €142,147 €151,632
    Monthly repayments after a 3 month payment break €994 €705 €564 €481 €427
    Increase in monthly repayments after a 3 month break €29 €15 €9 €7 €5
    Total amount to repay with a 3 month payment break €116,286 €124,739 €133,561 €142,744 €152,284
    Additional interest cost of a 3 month payment break €455 €499 €547 €598 €651
    Monthly repayments after a 6 month payment break €1,024 €720 €573 €488 €432
    Increase in monthly repayments after a 6 month break €59 €30 €19 €14 €11
    Total amount to repay with a 6 month payment break €116,743 €125,240 €134,109 €143,344 €152,937
    Additional interest cost of a 6 month payment break €911 €1,000 €1,096 €1,197 €1,304

    These are illustrative examples based on a sample rate of 3%. The calculations assume the interest rate will not change for the rest of the mortgage term. (At the end of a fixed rate period customers can choose from rate options available then or roll to the variable rate that will apply at that time. Variable rates can change during the life of a mortgage.) Monthly repayments are based on full capital and interest payments.

    A payment break means there will be no direct debit payments from your current account to your mortgage for the period of the break, while we will continue to apply interest to your mortgage during the payment break. The mortgage balance will have increased over the payment break, meaning your monthly instalment at the end of the break will be higher.

    In the 20-year example above:

    3 month payment break

    • After a 3 month payment break, the monthly instalment required to pay off the mortgage over the remaining 20 years is €564 which is €9 a month higher than without the payment break (the slight difference is due to rounding to the nearest euro).
    • When the entire 20-year mortgage term is considered, after a 3 month payment break the total amount repayable, originally €133,014, will increase by €547 to €133,561.

    6 month payment break

    • After a 6 month payment break, the monthly instalment required to pay off the mortgage over the remaining 20 years would be €573 which is €19 a month higher than without the payment break.
    • When the entire 20-year mortgage term is considered, after a 6 month payment break the total amount repayable, originally €133,014, will increase by €1,096 to €134,109.
  • 6. What are the key points to consider when thinking about a mortgage payment break?
    • Your mortgage loan will not go into arrears as a result of availing of a Payment Break.
    • The balance will be higher at the end of the payment break period than it was at the start of the payment break.
    • Your subsequent repayments will increase and you will pay more interest so you should only apply for a payment break when you are satisfied you need it.
    • The term (duration) of your mortgage will not lengthen as a result; it will have the same maturity date it had before the payment break unless you choose to extend your loan term (see question 2 for more information on this).
    • If you feel confident you can afford to make some partial or full mortgage repayments during the payment break period, you should strongly consider doing this. Paying down your loan as soon as you can will reduce the amount of interest you will pay over the life of your mortgage. Call us on 01 6113333 to discuss this.
    • If you have any doubts about taking a payment break, we strongly recommend you get independent legal or financial advice.
    • If you feel you might have longer term difficulty in meeting your mortgage repayments, we're here to help. More information including where you can get independent support with managing your debt is available here
  • 7. Will my mortgage rate change as a result of applying for a payment break?

    No, your mortgage rate will not change as a result of taking a payment break.

  • 8. How long will it take to put the payment break in place after I apply?

    Generally, it takes about 10 working days to set up a payment break. This is because the SEPA direct debit system is set up to call a payment some time in advance of the actual payment date.

  • 9. What if I need my payment break to start sooner than in 10 working days?

    We may be able to help you with an emergency request by reversing and/or refunding your next direct debit payment. Call us on 01 611 3333 to discuss this.

  • 10. Will I be told when the payment break has been applied to my mortgage?

    Yes. We will send you an SMS to confirm when your payment break request has been processed.

    Once the payment break has been implemented, we will send you a confirmation letter with full details of their payment break including implications for your mortgage contract.

  • 11. Will a COVID-19 payment break affect my record on the Central Credit Register?

    There will be no adverse impact on the credit records in the Central Credit Register or the Irish Credit Bureau of customers who avail of a payment break as a result of being financially impacted by COVID-19.

  • 12. My mortgage account is in joint names, how do I apply for a payment break?

    Simply provide the details requested for each mortgage accountholder in the payment break application – over the phone and online.

  • 13. If I have more than one mortgage, do I have to apply for each payment break separately?

    Yes. You need to apply separately for a payment break for each account.

  • 14. Can I apply for a payment break if I am on a fixed rate?

    Yes. Payment breaks are available regardless of the type of mortgage you have or the interest rate. The repayments will be higher at the end of the payment break to repay the loan by its maturity date, but the interest rate will not be impacted.

  • 15. Can I apply for a payment break if I am on a tracker rate?

    Yes. Payment breaks are available regardless of the type of mortgage you have or the interest rate. The repayments will be higher at the end of the payment break period to repay the loan by its maturity date, but the interest rate will not be impacted.

  • 16. What happens to my mortgage during a payment break?

    During a payment break your repayments for that period will be zero (i.e. you will not have to repay any capital nor pay any interest). But while you don’t have to make payments during the payment break, it is important to note that interest will still be applied to your mortgage.

    Your ‘break’ repayments and accumulated interest will be added to the amount owed and your repayments will be adjusted going forward so that your mortgage will be repaid within its agreed term. This means that your repayments will be higher than they were before the payment break and you will pay more in interest over the life of your mortgage, i.e. the cost of credit on your loan will be greater than it would be without the payment break.

    If you feel confident you can afford to make some partial or full mortgage repayments during the payment break period, you should strongly consider doing this. Paying down your loan as soon as you can will reduce the amount of interest you will pay over the life of your mortgage, while options such as extending your payment break or extending the term of your loan will cost you more in interest. Call us on 01 6113333 to discuss this.

  • 17. What happens at the end of a 3 month mortgage payment break?

    At the end of your COVID-19 3 month payment break you will have options to:

    1. Return to repaying your mortgage;
    2. Extend your COVID-19 payment break for another 3 months; OR
    3. Return to repaying your mortgage and extend your loan term (duration) by 3 months, to bring your new repayments closer to where they were before your payment break.

    Before the end of your 3 month payment break we will write to you with information about these options and how to avail of them.

    If you choose option 1 you won’t have to do anything an d your mortgage direct debits will automatically start again at the end of your 3 month payment break. Your repayments will be higher to accommodate interest charged during the payment break period and to repay your mortgage over its agreed term.

  • 18. Is a COVID-19 payment break included in the maximum three payment breaks allowed over the life of a mortgage?

    Under our normal flexi-options a customer can take up to 3 payment breaks over the life of the mortgage and COVID-19 payment breaks are not counted as part of this.

    To be eligible for a payment break under our standard Flexi-Options your mortgage loan must be fully drawn down at least 2 years , there must be at least 12 months between payment breaks and you must have complied with all the terms and conditions of the mortgage. Applications are subject to approval. Available on your principal private dwelling only. Only available on annuity (standard capital and interest) repayment mortgages. Interest is applied during the break and the amount owed is higher at the end of the payment break which means you pay more interest over the life of the loan.

  • 19. Does a payment break affect my TRS payments?

    Yes. If you are eligible to receive Tax Relief at Source (TRS), your TRS is calculated based on the amount of interest paid. Therefore, for months where no interest is paid on the mortgage loan, there will be no related TRS payments. As TRS payments operate one month behind, you should see the TRS impact in the subsequent month. For example, if you don’t make mortgage repayments for the three months of April, May and June, you will not receive TRS payments in May, June and July.

  • 20. Is there additional support or independent advice available if I feel I might have longer term difficulty repaying my mortgage?

    It is important to note that if the impacts to your financial circumstances could be longer lasting, a COVID-19 payment break may not be suitable for you. Please contact us at the earliest possible stage if you are concerned that you may experience longer term financial pressure and would like to explore additional supports to help you repay your mortgage loan. We are here to discuss this with you.

    We will need you to complete a Standard Financial Statement (SFS) as a first step in this process. The SFS is a standard form set out by the Central Bank of Ireland designed to let you give us an accurate picture of your financial circumstances. In addition to helping us find the best solution for you, it ensures that we meet our duty to give you the full benefit of the legal protections that apply to you.

    If you avail of other supports with us to help you manage your mortgage repayments, we will treat this assistance as forbearance (i.e. a special arrangement) and it will be recorded under your credit records with the Central Credit Register and the Irish Credit Bureau. More information including where you can get independent support with managing your debt is available here

  • 21. Is there a cooling off period if I change my mind about availing of a payment break?

    By way of a ‘cooling off period’, you have control over your repayments during your payment break and there is no cost to you for making repayments to your mortgage loan while you are on a payment break. Even if you are on a fixed interest rate, you can make a payment during the payment break period of your current repayment amount plus 10% without cost.

    Paying down your loan where you can afford to do so will reduce the amount of interest you will pay over the life of your mortgage, while options such as payment breaks or extending the term (duration) of your loan will cost you more in interest.

  • 22. What are the key things to consider in choosing to extend my mortgage loan term (duration)?
    • If you choose to extend the term of your mortgage loan, the maturity date of your mortgage loan will be pushed out by the duration of your term extension. This means, for example, if choose to extend your term by 3 months your mortgage will mature 3 months after its original end date.
    • An extension to your mortgage term may cause a misalignment with your planned retirement date. If you extend your mortgage term it could also have implications for your life cover. You should check with your life insurance provider to ensure your level of cover is sufficient to cover the full term of your mortgage.
    • If you choose to extend the term of your mortgage loan, your repayments will be lower as the amount you owe will be spread out over a longer period. But because the term of our loan will be longer, you will pay more interest – i.e. your cost of credit will be higher than it would be without a term extension.
    • If you can afford to make additional repayments (i.e. ‘overpayments’) at any stage during your remaining term you should strongly consider doing this. Paying down your loan when you can will reduce the amount of interest you will pay over the life of your mortgage and may also reduce your term. Click here for more information on Overpayments.


Apply for a COVID-19 Mortgage payment break
WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT.
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