Mortgage holders could end up spending thousands of euro extra in interest if they take a six-month break from payments.
More than 65,000 mortgage payment breaks have been granted since the banking sector announced the scheme on March 18. Initially set to run for three months, it has now been extended to six.
While the scheme was largely welcomed, analysis by consumer comparison site Bonkers.ie shows that taking banks up on the option of pausing payments could still leave mortgage-holders out of pocket as interest is still accruing. In some cases, this could run as high as €4,334.
Daragh Cassidy of Bonkers.ie warned customers to be wary.
"The saying that there's no such thing as a free lunch definitely applies here," he said.
"While the offer of six months free from mortgage payments might sound appealing to a lot of households that are in financial distress at present, people need to be aware of all the extra interest they're racking up, which will need to be repaid."
In many cases, interest will be added onto monthly repayments after the six-month moratorium is up and spread across the rest of the mortgage, Mr Cassidy said.
"This means many people may not notice much of a difference. However, it all adds up," he said.
The average mortgage for first-time buyers is around €225,000 according to the Banking & Payments Federation, which represents the banking sector here. At a 3.2% interest rate and over a 30-year term, it would end up costing a mortgage-holder more than €125,000 in interest to a bank.
For someone with a 30-year mortgage of €300,000, the extra interest built up during their six-month payment break is €4,334. For a mortgage of €200,000 over 30 years, the interest is more than €2,800, while someone with a balance of €100,000 would see extra payments of €987 to €1,445, depending on how long is left on their mortgage.
Meanwhile, mortgage switching expert Martina Hennessy of Doddl.ie, said some mortgage holders could save thousands by moving providers.
The lowest rate in the market is 2.2% but more than 220,000 people are paying variable rates of up to 4.5%, she said.
"Switching from 4.5% to 2.2% will result in a saving of €127 per month for every €100,000 outstanding over a 30-year term," Ms Hennessy said.
"On a mortgage of €300,000, the annual saving will be €4,572. Taking a five-year fixed rate at 2.2% will save €22,860 over that period."