New Mortgage to Rent Scheme Launched

29 Jun 2012

Under the national mortgage-to-rent scheme, people who are having trouble paying their mortgages can switch from owning their home to renting their home as social tenants. If you take up a mortgage-to-rent scheme, you will no longer own your home or have any financial interest in it.


For you to qualify for the mortgage-to-rent option:

  • You must have been involved in the Mortgage Arrears Resolution Process (MARP) with your lender and agree that you can no longer afford to pay your mortgage loan now or in the future.
  • You must qualify for social housing from your local authority.
  • You must own the property you live in, with a current market value of less than €220,000 in the Dublin area or less than €180,000 in the rest of the country.
  • Your property must be in good condition, be in a suitable location and must suit your needs.
  • You must not own any other property or have assets in excess of €20,000.
  • Your net household income must not exceed €25,000 or €35,000 a year, depending on which part of the country you live in. Net household income is the household income after taxes and social insurance have been taken off. There are some additional allowances for children.
  • You must have a long-term right to remain in Ireland.

You must get independent legal and financial advice before the process can go ahead. Your lender will pay up to €500 for legal advice. The Money Advice and Budgeting Service (MABS) can provide debt advice.

How it works

You voluntarily surrender possession of your home to your mortgage lender. Your mortgage lender immediately sells your home to a housing association, who will then rent it to you.

The lender and the housing association agree the price of the property based on the market valuation of your home. The proceeds from the sale of your home to the housing association will go towards your mortgage debt and you come to an arrangement with your lender for the remaining repayment, if any.

You will no longer own your property but you can continue living in your home as a social housing tenant and you will have a tenancy agreement with the housing association. Your changed status from owner to tenant is confidential.

If your financial situation improves, there will be an option to buy the home back from the housing association after a period of 5 years.

The process involves surrendering ownership of your property and the house being purchased by a approved housing body at just under the market value. The original lender provides 70-75% of the finance, the balance being met by the State. The borrower then becomes a tenant in the house paying rent according to their ability to pay.

Any outstanding debt on the house remains in force unless the mortgage lender agrees to writing it off.

Housing associations

A housing association is a registered charity and an independent not-for-profit organisation which has been approved to provide and manage social housing. Housing associations aim to provide housing for those who cannot meet their housing needs from their own resources at an affordable rent.

You will pay a rent based on your income. If your income increases the rent will increase but if your income falls then the rent payment will also reduce. In this way the rent paid remains affordable.
Social housing

The assessment of suitability for social housing is carried out by local authorities. Your lender can provide an application form to apply to your local authority.


If your lender does not agree that you are suitable for the mortgage-to-rent scheme, you can appeal to the lender's Appeals Committee.

How to apply

Where appropriate your lender will offer you the opportunity to apply for the scheme and give you an application form for mortgage-to-rent. If you are interested, you give consent in writing to your lender to submit your details to a number of organisations involved in the scheme.

You then need to complete a number of steps:

  • You agree to surrender ownership of your home in exchange for a tenancy agreement with a housing association.
  • You complete your mortgage-to-rent application form and give it to your lender.
  • You complete a social housing application form and give it to your local authority.

Where to apply

You should contact your mortgage lender to discuss your suitability for the mortgage-to-rent scheme.

For more information contact the Welfare to Work Section in the INOU on (01) 856 0088 or by e-mail:


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