Unsustainable mortgages Let me spend a moment to specifically address what the Cooney Group has called “unsustainable mortgages.” These might be described a number of ways. Most simply, they are mortgages where the homeowner has such severe affordability problems that there is very little prospect of eventually servicing the debt and retaining ownership of the home.
The Cooney Group proposed an initial simple rule of thumb according to which being in arrears for more than, say, 18 months accumulated overdue interest, and where the property is in significant negative equity (making it impossible to trade down and unlikely that improved housing prices will provide a benefit in a reasonable time period) are in combination strong indicators of an unsustainable mortgage.