Short-term mortgage debt relief comes at a high price

While these agreements provide borrowers experiencing difficulty meeting their mortgage repayments with immediate relief and allow them in many cases to stay in their homes, the practice was last night criticised by Fianna Fails finance spokesman Michael McGrath.

Speaking to the Sunday Independent, he said: The reality of arrears capitalisation is the borrower ends up repaying a lot more money. Theyre paying the bank interest above and beyond what it would have been originally for the mortgage when it was drawn down.