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Home Loan Scheme

Dáil Éireann Debate, Wednesday - 6 March 2019

Wednesday, 6 March 2019

Questions (309)

Noel Rock

Question:

309. Deputy Noel Rock asked the Minister for Housing, Planning and Local Government if he will consider freedom of market choice in terms of the mortgage protection insurance in the Rebuilding Ireland home loan scheme in view of the fact that some persons are paying ten times the market value; and if he will make a statement on the matter. [11039/19]

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Written answers

The Local Authority Mortgage Protection Insurance scheme is a group scheme.  It is a requirement that all borrowers of local authority housing loans, including the Rebuilding Ireland Home Loan, who meet the eligibility criteria, join the scheme. Where a prospective borrower fails to qualify under the local authority MPI scheme, they must source comparable and alternative adequate cover elsewhere and provide evidence of this cover to the local authority.

The scheme provides an appropriate level of insurance cover to those who wish to avail of the Rebuilding Ireland Home Loan. It offers a number of additional features over and above the standard MPI products available on the market. Standard MPI schemes are individually priced, based on an applicant’s age, amongst other factors, whereas the local authority MPI scheme is a group arrangement, offering a single group rate per €1,000 sum assured to all participants in the scheme. The scheme also provides other benefits over standard MPI schemes. These include the payment of mortgage repayments if there is a valid claim as a result of disability; an additional payment of €3,000 in the event of a member’s death, separate to life cover; and members are also covered for death up to age 75 rather than 65 as is the case under standard MPI cover. 

To change the conditions of the scheme to allow borrowers to opt out would have a negative impact on it and increase the cost for all remaining borrowers. It would also increase the risk to local authorities and could therefore increase the cost of borrowing in the future.

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