A group representing mortgage experts has called for a ban on split mortgages with accruing interest.
The Association of Expert Mortgage Advisors says such mortgage products are really no different to interest only extension periods.
The AEMA said there was a distinct possibility that homeowners are being misled into believing that they have secured a long-term viable solution to their financial troubles - when in fact they are simply racking up further debt for another day.
"While we believe in the concept of split mortgages, some of the versions being presented to homeowners are far from equitable," DJ O'Donovan of the AEMA said.
"There are particular split mortgage terms being offered that, rather than relieve struggling mortgage holders from their financial predicament, could actually make their long-term position worse. We have reviewed the market and our view is that there are good split mortgages, reasonable split mortgages and really bad split mortgages."
The group believes any split mortgage must include a genuine incentive to repay and a clear long-term capacity to repay.
It says the forecasted payments must be realistic and not dependent on the homeowner doubling their income over the next ten years or winning the lottery.
The AMEA says it has been disturbed at reports that some lenders are seeking to charge interest on the "parked" piece of the debt and that others were looking to tie in unsecured debt to the homeloan, converting this to secured debt as part of the deal.
The group believes that where the only option available to the mortgage holder is a poor split mortgage offering, alternative solutions including bankruptcy via the new insolvency legislation may prove more beneficial to the borrower in the long-run.
