Minister O’Brien Announces Significant Improvements to ‘Mortgage to Rent’ Scheme

-          Scheme made more accessible

-          Equity limit increased and adjusted by region

-          Purchase price thresholds updated

-          Additional flexibility in bedroom numbers for certain borrowers

-          Changes a key action of Housing for All, aimed at ensuring scheme supports those who need it

The Minister for Housing, Local Government and Heritage, Darragh O’Brien, TD, today announced a number of significant improvements to the ‘Mortgage to Rent’ (MTR) scheme for people who have borrowed from commercial private lending institutions and who are at risk of losing their homes due to mortgage arrears. The changes will result in more people being able to benefit from the scheme, which has been amended to reflect current housing market conditions and most up-to-date research on those in long term mortgage arrears.

The MTR scheme offers households in acute, unsustainable mortgage arrears situations, with little or no prospect of a significant change in circumstances, the chance to surrender a property to a lender and in turn become a social housing tenant whilst staying in their own home and community. As part of the scheme, the home will be brought up to private rental standards.   

The key changes, which will apply from 14 February 2022, are:

• an increase to the positive equity limit, which is being adjusted by region to align it with the range of house prices and market conditions across the regions
• purchase price thresholds updated to take account of current market conditions
• additional flexibility in the number of allowable bedrooms in a dwelling – this will apply for borrowers aged 65 and above, and borrowers who have a disability, or where a dependant has a disability

The changes announced today follow a review of the MTR scheme by the Department of Housing, Local Government and Heritage. A strengthened MTR scheme was a commitment in both the Programme for Government and in Housing for All, the Government’s national plan on housing to 2030. Housing for All commits to strengthening the scheme to ensure that it is helping those that need it, with delivery of an average of 1,000 solutions every year. In 2021, 678 borrowers availed of the scheme, more than three times the amount of borrowers (196) who availed of the scheme in 2019.

Announcing the changes at an event in St. Finian’s Crescent, Lucan, Co Dublin held with iCare Housing, one of the non-profit Approved Housing Bodies (AHBs) who participate in the MTR scheme, Minister O’Brien said:

“These changes will make life easier for many households in mortgage distress. For someone in mortgage arrears to lose their home is hugely difficult and stressful. Mortgage to Rent provides a solution to a complex problem by giving a person or family the option of remaining in their own home despite acute mortgage difficulties.

“It is the Government’s objective to keep people in their homes where it is sustainable and the Mortgage to Rent scheme supports that objective. Today’s changes position the scheme to provide a solution for 1,000 families per year from 2022, approximately 50% more than the number of completed cases in 2021, and towards a trebling of the number in 2020.

“It’s clear that there is continued demand for the scheme and I will keep the impact of these new changes under review and make future improvements if necessary. Ultimately we want the use of this scheme to be a long-term sustainable solution for the families and individuals for whom it is designed to assist.”

Speaking at the announcement, iCare Housing CEO David Hall said:

“The Government changes to the Mortgage to Rent scheme are good news for those in mortgage difficulties throughout the country. As an Approved Housing Body helping people with acute and unsustainable mortgage arrears to start afresh, we’re pleased to see scheme changes that will give more people a chance to stop the clock on financial stress, strain and uncertainty about the future and secure their housing situation. I’ve no doubt that these changes will give more families to chance to start again whilst staying in their own homes and communities.”

From the MTR scheme’s introduction in 2012 to the end of 2021, 1,682 families have remained in their home due to the scheme. A total of 5,012 individuals (2,738 adults and 2,274 children) are benefiting from the scheme. A further 720 cases are actively being progressed. In 2019, 196 families benefited from the scheme with a further 363 families benefiting in 2020. In 2021, the number had increased to 678.

Further information on the scheme is available from: www.mortgagetorent.ie

The review of the MTR is available at: https://www.gov.ie/en/publication/ed57b-2021-review-of-the-mortgage-to-rent-scheme-for-borrowers-of-commercial-private-lending-institutions/