New hope for families in debt trap
A NEW, bank-driven move to help families caught in the negative equity trap to move to a new home offers a glimmer of hope in a depressed housing market.
By one estimate, more than three- in-five mortgage holders are stuck in situations where their property is worth less than their mortgage.
Now the Central Bank has given permission to two major lenders to offer a new type of home loan.
It will involve their negative equity debt being tacked onto a mortgage for a new property, freeing them up to move to a bigger house.
They will carry their debt with them, but at least it offers some hope to young couples to trade up and may also help to revive part of the housing market.
They will need to sell their home first, although there may be some flexibility on this. The scheme will be limited to those who can meet the repayments, but it is a welcome sign in an otherwise grim picture.