Are you one of the thousands of homeowners that are finding it difficult to meet your mortgage repayments? Are you wondering what the future holds in store for you as interest rates continue to rise? I believe I can offer a balanced solution to this looming crisis: my Equity Option Incentive proposal, outlined below.

Despite the fact that the European Central Bank continue to keep its key interest rate at one per cent, several Irish lending institutions (Bank Of Ireland, Permanent TSB, EBS, AIB and KBC) have recently increased their standard variable mortgage rates. Data available from the Central Bank confirms that up to 67% of mortgages are variable; this highlights just how many people are affected by an increase in interest rates.

Hundreds of thousands of people, already burdened with negative equity, reduction in salaries and job losses, are now placed in a very difficult situation as a result of these interest rate increases. So what does the future hold for these people?

The cold reality is that we are all no more than once removed from this situation. Every one of us will have a family member, relative, friend or neighbour who finds themselves in this unprecedented situation. In this regard, there is no difference between public and private sectors; this is an issue that affects all sectors of our community, in each and every community throughout the country.

A cloud darkens the life of thousands of families needlessly. This unprecedented situation is the cause of serious stress to many homeowners throughout the length and breadth of Ireland. Can one imagine what it’s like to be living in your ‘home’ and everyday to have a cloud of fear and uncertainty looming overhead? Can one imagine the effect this can have within the home? A schoolteacher recently remarked “I can see it in the schoolchildren, I can see the stress”. The cost to the country of this mess cannot be simply measured in Euros – peoples’ health is at stake here, their lives, their spirit, their dignity.

Foreign analysts have commented on the residential mortgage situation in Ireland, some fearing that if this is not addressed by the Government, the Irish economy could head into another downward spiral, what they refer to as a ‘double dip’.

Many of you will remember the speech made by the late Minister for Finance Brian Lenihan in December 2009 calling the people of Ireland to “patriotic action”. This call plucked at the very heartstrings of the nation and the nation rowed in behind the Government to avert a banking collapse. Now I feel it’s the duty of the Government to put its people before its banks. The vast majority of homeowners borrowed in good faith and want to pay their way. They want to hold onto their homes and I believe they will play their part but they just need guidance.

I am not suggesting ‘bail outs’ or ‘debt forgiveness’ for homeowners. I believe there is an opportunity for Government and banks to liaise and put structures in place to assist homeowners in planning their way out of their difficulties, over a number of years, and I feel this must be addressed as a matter of priority. I’m not talking about one year moratoriums or leaving mortgages on interest-only payments for another year or indeed deferred interest schemes. What I’m proposing is a proper work-out plan to enable homeowners to plan their way out of this situation, while interest rates (and particularly fixed rate options) are still reasonably low. I believe the Equity Option Incentive Plan that I’m putting forward offers such a solution and at a miniscule cost to the exchequer.

Perhaps the legacy of hundreds of years of suppression is that the importance of ‘owning’ our own home is deeply embedded in the psyche of our small nation state. Perhaps that deep need for ‘security of tenure’, to know that the roof over your head is secure, is what has ranked Ireland among the top five in the world in terms of home ownership for many years.

For first time buyers, handing over their booking deposit is their first giant step in owning their own home. Bearing in mind our history as a nation, this booking deposit is indeed for these individuals a declaration of their independence – it says ‘we can make it on our own; we can provide a home for our family’. And, bearing in mind where we have come from as a nation, this is indeed some accomplishment, some achievement, for that young person, or that young couple.

For the past number of months I have been offering commercial mediation services in a voluntary capacity to both individuals and couples who find themselves in serious financial difficulties. I have been overwhelmed by the amount of mortgagees who are living in fear, wondering what the future holds in store for them, what the banks are going to do next – that is, aside from pushing up interest rates.

A few years from now we’ll be celebrating the centenary of 1916, commencing a series of commemorations paying tribute to our forefathers who fought and died for the independence of our nation, who had a vision of what we could become as a nation. Isn’t it sad that almost one hundred years later we have hundreds of thousands of homeowners throughout Ireland struggling for survival, struggling for their own individual independence, for their dignity?

In order to address this issue and to avert a crisis before it’s too late, I believe the hidden solidarity that lies deep beneath the layers of Irish society must come to the surface.

I attach my Equity Option Incentive proposal which I believe offers a balanced solution to the current situation by offering incentivised support to these mortgagees whilst at the same time providing both Government and banks the opportunity to put solid structures in place to allow people to plan their way out of this situation.

Give these homeowners back their spirit and restore their dignity.

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This is a Cáirde, a call to patriotic action.

Go to EOIP Example.