Remortgaging With an Arrears History or Negative Equity

A realistic guide for borrowers whose mortgage history is not spotless — what is possible, what is not, and what helps.

Plenty of Irish borrowers carry scar tissue from the last downturn or a rough patch since: missed payments, a restructure, an alternative repayment arrangement, or a loan sold to a fund. Others are simply stuck on an uncompetitive rate with a loan sale servicer and want out. This page is honest about the landscape: switching with a clean recent record is very achievable; switching with active arrears is not; and the territory in between depends on time, documentation and lender policy.

Nothing here is financial advice on whether to switch, and nothing here is debt advice — for borrowers in difficulty, MABS (the Money Advice and Budgeting Service) and the Abhaile scheme provide free, independent help, and we would encourage anyone in active arrears to use them.

What lenders actually look at

A switching application is underwritten on your credit record and your recent conduct. Lenders access the Central Credit Register, which records mortgage performance — payments, missed payments and restructures — for recent years. What most mainstream lenders want to see is a sustained period of clean, full repayments; policies on how long vary, and the definition of clean typically excludes periods on reduced-payment arrangements.

You are entitled to your own Central Credit Register report free of charge. Get it before applying — knowing exactly what a lender will see lets you time the application and explain the record accurately rather than being surprised by it.

Negative equity: the arithmetic problem

A switch requires the new loan to be within the new lender's loan-to-value limits, so a property worth less than its mortgage cannot be refinanced in the ordinary way — the numbers do not close. True negative equity has become rarer as prices recovered, but it persists in pockets and on loans that capitalised arrears.

Where equity is thin rather than negative, small facts move the dial: an updated valuation reflecting improvements, a lump sum reduction from savings, or simply another year of capital repayments. Where equity is genuinely negative, the realistic routes are engagement with your current lender on the loan you have, or resolution frameworks — not a switch.

Loans sold to funds and credit servicers

If your mortgage was sold in a loan sale, your legal protections travelled with it — the Consumer Protection Code and the Code of Conduct on Mortgage Arrears continue to apply through the regulated credit servicer. But funds do not offer new lending or competitive retention rates, which is why borrowers with sold loans are among the most motivated switchers.

The switching test is the same: current conduct and credit record. A borrower whose loan was sold years ago but who has paid in full ever since is often more switchable than they assume. The title work on the legal side involves an extra wrinkle — the chain of ownership of the charge through the sale must be reflected on the folio so the redemption and release come from the correct entity — but that is our problem to solve, not yours.

Restructures, splits and warehoused portions

Alternative repayment arrangements — term extensions, capitalisations, split mortgages with warehoused portions — keep people in their homes, and they also complicate switching: the warehoused balance is still debt, and a new lender must be willing and able to refinance all of it. Refinancing a split mortgage therefore usually needs enough equity and income to take out both portions at once.

Before attempting a switch from a restructure, get the full current figures for every portion of the loan, in writing. Settlement discussions with some servicers about discounted redemption of warehoused balances do occur in the market; whether to pursue that is a financial negotiation to take advice on, and any agreed deal then needs precise legal documentation — which is where we come in.

If you are in difficulty now

Active arrears are a resolution problem, not a switching problem. The Code of Conduct on Mortgage Arrears obliges your lender to follow the Mortgage Arrears Resolution Process, and free help exists: MABS, the Abhaile solicitor and accountant panels, and the insolvency options overseen by the Insolvency Service of Ireland, including Personal Insolvency Arrangements that can restructure mortgage debt with court oversight. Taking advice early, engaging in writing and keeping every letter genuinely changes outcomes. When the record has healed, the switching market reopens — we have set out above what that takes.

Frequently asked questions

Can I switch lender with active arrears?

Realistically no — mainstream lenders require clean recent repayment history. The productive path in active arrears is the resolution process with your current lender, with free support from MABS and Abhaile, and revisiting a switch once the record has recovered.

How long after arrears can I remortgage?

There is no single rule — lenders each set their own policy on how much clean history they require, and the Central Credit Register shows recent years of performance. A sustained period of full payments is the common thread. Check your own CCR report before applying.

My loan was sold to a fund. Can I still switch?

Yes — being with a fund does not disqualify you. What matters is your credit record and equity. Sold-loan borrowers with clean payment histories are frequent and successful switchers, and often have the most to gain.

Can I remortgage in negative equity?

Not in the ordinary way — a new lender will not lend more than its loan-to-value limits allow against the current value. Options lie with your existing lender or the formal resolution frameworks until the equity position improves.

Does a past restructure show on my credit record?

Restructures and arrangements are reflected on the Central Credit Register for the periods it covers. You can obtain your own report free of charge and see exactly what a lender will see.

Talk to a remortgage solicitor

Mary Molloy Solicitors acts for homeowners and property owners across Ireland on remortgages, switches, top-ups and transfers of equity. All enquiries are handled through our Dublin office.

This page contains general information about Irish law and practice. It is not legal advice, it may not reflect your circumstances, and reading it does not create a solicitor–client relationship with Mary Molloy Solicitors. We do not advise on taxation; please speak to your accountant or Revenue. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.