Updated 13.00

AIB has reached a deal with a family, writing-off more than a third of their mortgage debt and allowing them to stay in their home.

According to the Irish Independent, €150,000 was written-off as part of the agreement, which is thought to be the biggest of its kind so far in Ireland.

Last November, AIB entered a partnership with the Irish Mortgage Holders Association to work on a number of write-down deals involving the bank's customers.

This latest arrangement involves a married couple in greater Dublin - who have two children - and a mortgage of €400,000 which had become unmanageable, with arrears of €30,000.

Under the terms of the deal, the bank has written off €150,000 of the debt and the family will continue to pay capital and interest on around €200,000.

Another €40,000 will be 'parked' with no repayments or interest and the family will be allowed to stay in their home.

The agreement was brokered by the Irish Mortgage Holders Organisation. Director David Hall warned Breakfast's listeners that every case is exceptional so endebted borrowers shouldn't necessarily expect to benefit from a similar arrangement:

But not everyone is in favour of the arrangement, Karl Deeter of Irish Mortgage Brokers spoke to Newstalk's Pat Kenny Show about who the arrangement best serves: 

It is believed the deal is the largest of the 250 residential write-offs agreed by the bank to date and could give hope to the 96,000 mortgage-holders in arrears of three months and over.

Karl Deeter & Stephen Curtis discuss IMHO quotas:

All of the parties involved were supposed to have maintained confidentiality, but one of the parties spoke to the Irish Independent. Karl Deeter thinks he knows who it was:

Irish Independent Personal Finance Editor Charlie Weston broke the story. He says more families will be looking for similar deals: