The local authority mortgage protection insurance (MPI) scheme has applied to all house purchase loans approved by local authorities after 1 July 1986, including the Rebuilding Ireland Home Loan introduced on 1 February 2018. Local authority mortgage protection insurance is charged at the rate of 0.555%, this rate does not vary between local authorities.
It is obligatory for all local authority borrowers who meet the eligibility criteria to join the scheme, which is a group policy. Altering this condition would have a negative impact on the scheme and increase the cost for all existing borrowers.
A local authority housing loan applicant who is not eligible for the local authority MPI scheme must source a suitable comparable individual MPI policy from the market. The level of coverage/benefits provided under the alternative MPI should be similar to that available under the Local Authority Group MPI.
The final decision on loan approval is a matter for each local authority and its Credit Committee on a case-by-case basis. Decisions on all housing loan applications must be made in accordance with the statutory credit policy that underpins the scheme, in order to ensure consistency of treatment for all applicants.
The scheme is subject to periodic review and competitive tendering in accordance with the terms of EU Directives relating to the award of public service contracts. This is to ensure that the most appropriate cover at the best value for money is secured for local authority borrowers over the entire life of their mortgages.
The most recent public procurement competition for the provision and administration of this MPI scheme was conducted by the Office of Government Procurement. The contract resulting from this open tender competition came into effect from 1 January 2017 and is due to expire on 31 December 2021.