BANK OF IRELAND has launched a new mortgage product for older people looking to downsize.

It says the pilot was created in response to challenges faced by existing homeowners who find their needs have changed.

It was thought up by a group of private sector representatives, comprising homebuilders, equity investors, representative bodies, and professional services.

“The group considered actionable ways in which the private sector can accelerate housing supply in a responsible manner,” the bank said.

The trade-down lending product is to launch in early 2026, and will allow customers to purchase a new property outright in advance of the sale of their current home.

Both properties will serve as security, with the sale of the existing property clearing the borrowing and any interest accrued within 12 months.

The maximum borrowing amount at drawdown will be 60% of the current valuation of their home and the loan rate is 7% variable.

Davy Research analysts said the bridging loan expands a market that was absent until recently.

“With liquidity in the Irish housing market low, the greater availability of such products should remove some friction points and result in an increase in liquidity,” they said.

Bank of Ireland has established a dedicated phone line for customers to register an interest in the pilot. They can call 0818 200434 on weekdays between 9am and 5pm.

The group of private sector representatives also discussed financing solutions for homebuilders to scale up activity across the country.

In response, Bank of Ireland considered equity capital solutions to further support homebuilding which was discussed with the government in advance of its recent housing action plan.

“While there is positive individual engagement between policy makers and parts of the private sector, the group also noted that a more structured dialogue directly between senior officials and private sector leaders on the issue of finance would be productive,” the bank said in a statement.

It said it has written to the government to propose a regular housing finance forum where senior officials and private sector leaders can “exchange insight, discuss latest market developments, and provide feedback” with the goal of working together to housing supply.