Home buyers may soon be able to get a mortgage through their local credit union.
According to reports today, credit unions are set to enter the mortgage market with up to €400m available for new loans.
The Credit Union's Solution Centre - its innovation hub - has over the last ten months built a mortgage support framework, including assessment and standardised administration processes.
It believes there will be significant take-up amongst members of participating credit unions for its new offering.
The new mortgage service is initially being made available to credit unions representing almost one million credit union members.
"Through the Solution Centre we have been able to help many credit unions make the move into the mortgage market, and are moving ever closer to our goal of making Irish Credit Union full service outlets for customers' financial needs," commented Kevin Johnson, CEO of the credit union representative body CUDA.
Credit unions are subject to lending restrictions through regulation, which dictates that only 10% of their loan book can be for terms longer than ten years, with the possibility of that being extended to 15%.
Therefore there are very few credit unions with the capability to provide such loans, which is why only 2% of the available €5bn has been lent out on terms of over ten years,
It is essential that these restrictive limits are increased to allow more people to get their home loan from their credit union, Mr Johnson said.
He also said that increased long term lending will improve the income levels and financial stability of participating credit unions, and may enable them to offer stronger dividend rates and even special offers for savers.
Credit unions are expected to target first-time buyers, people looking to trade up - or down - and those looking to acquire properties in tenant purchase and affordable housing schemes.
