A Circuit Court has ordered a finance company to give a low-interest fixed-term rate to a couple who had difficulty repaying their mortgage.
The company Pepper Finance, who manages the loan, said it does not offer fixed rates but the court ordered one to be granted to the couple in what is being described as a significant ruling.
The Irish Mortgage Holders Association say the ruling could have implications for tens of thousands of people in financial difficulty.
Its founder David Hall said the Government and the Central Bank have been "asleep at the wheel" on the issue and had forced the Courts to intervene.
The couple from Co Laois applied for a Personal Insolvency Arrangement because they were struggling to meet their mortgage repayments which were at a rate of 5.5%.
Pepper Finance rejected the proposal and the couple appealed to Tullamore Circuit Court to overturn the lender's veto.
The Irish Independent reported that counsel for the couple asked the Judge to accept plans for them to repay their mortgage at a rate of 2.5% over 25 years.
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Pepper Finance refused saying they do not offer fixed rates and it would be fundamentally unfair for the courts to compel them to.
But the company would not reveal how much they paid for the loan.
And Judge Mary O'Malley Costello ruled in the couple's favour.
Pepper manages at least 80,000 mortgages, some of which were sold to so-called vulture funds by the banks.
The ruling has been described as significant.
Solicitor Anthony Joyce, whose firm represented a couple and their personal insolvency practitioner (PIP) , said the case sets a legal precedent which could benefit others seeking Personal Insolvency Arrangements.
Mr Joyce said: "This does set a precedent insofar as people in this situation where their being laboured with high-interest rates can go to a personal insolvency practitioner and that PIP can apply this case to their particular scenario".
Minister for Finance Michael McGrath welcomed the decision by the court.
Mr McGrath said he has told both the Central Bank and mortgage lenders of his view that borrowers should be offered fixed rates when variable rates reach very high levels, which is currently not in the Code of Conduct on Mortgage Arrears.
However, Mr Hall said the courts had been forced to intervene in this case because of the failure of the Government and the Central Bank to tackle the issue of high-interest rates for those in mortgage arrears.
He said: "I think the court intervened out of the necessity to protect, in this instance this couple where they're on high-interest rates in a vulture fund and the courts should never have had to intervene.
"Government policy is allegedly to intervene and stop high interest rates being spread across different lenders.
"The Central Bank has a pivotal role in consumer protection and seems to me to have been asleep at the wheel and in the absence of all of these interventions the court had no choice but to intervene in a positive way to protect this couple involved and many tens of thousands other families who will be directly affected by high rates."
In a statement, Pepper Finance says it is currently reviewing the court decision.
It said while it is not a lender and does not offer fixed-rate mortgages it does have flexibility to implement solutions for people depending on individual circumstances.
The company said: "We are currently reviewing the court decision and its implications for us, our clients and our customers.
"We have one of the broadest range of temporary and longer-term forbearance solutions in the Irish market and have helped thousands of customers find sustainable solutions to their situation.
"While Pepper is not a lender and does not offer fixed rate mortgage products, we do have the flexibility to implement solutions including interest rate discounts and fixed reduced monthly repayments, both for short term and extended periods, based on affordability and an assessment of the customer's individual circumstances."
