Negative equity mortgage holders could be thrown a lifeline

People in negative equity could be offered new mortgages.

According to the Irish Independent, the Central Bank has given Permanent TSB and Bank of Ireland permission to offer a new type of homeloan which would see existing debt added onto a loan for a new property.

More than half of mortgage holders are in negative equity - meaning their property is worth less than their remaining mortgage.

Under this scheme, to be offered by Permanent TSB and Bank of Ireland, these mortgage holders will be able to move house - and take their negative equity debt with them.

Up until now, the Central Bank was reluctant to give the go ahead for this new type of loan - for fear that it would drive people into deeper debt.

But strict limits will be imposed to make sure it is only offered to people who are able to make the repayments - and there will be a cap imposed on the amount of negative equity that can be carried on.