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Law360, London (March 20, 2020, 2:57 PM GMT) -- Ireland's Central Bank has said the nation's lenders are free to grant a three-month payment holiday for mortgage holders impacted by COVID-19.
Ireland's main banks agreed to support homeowners weathering the economic impact of the coronavirus pandemic by delaying mortgage repayments after Finance Minister Paschal Donohoe announced a package of measures to help borrowers.
The state's five banks — AIB, Ulster Bank, Bank of Ireland, KBC Bank Ireland PLC and Permanent TSB PLC — had asked the Central Bank to assure them that forbearance measures which they are prepared to offer households and businesses will not affect customers' credit ratings.
"There is no impediment to the banks introducing a three-month COVID-19 payment break for those affected by the pandemic," Ireland's central bank said Thursday.
The lenders have said they prepared to offer their customers impacted by the pandemic the option of taking a payment holiday to support a temporary income shortfall.
"People who may be experiencing particular vulnerabilities as a result of the impact of COVID-19, for example, illness or loss of income, must be provided with whatever reasonable arrangements or assistance may be necessary in dealings with regulated entities," the central bank said in a statement.
Borrowers affected financially by COVID-19 must contact their banks to discuss the flexibility available to them, Minister Donohoe said while announcing the measures on Wednesday. Homeowners with tenants should seek a payment break to allow them to exercise due levels of forbearance to renters, he added.
Britain's banks have also told households hit by coronavirus that they could be offered a delay on their mortgage payments. The unpaid interest will still be recovered later, but individual credit ratings will not be affected.
--Editing by Rebecca Flanagan.
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