Mortgage lenders have vowed not to take legal action against struggling homeowners - but only if they can work out a deal on repayments.

Banks and building societies stressed any agreement would have to be "mutually acceptable" and would be reviewed every six months.

In a so-called statement of intent, the Irish Banking Federation (IBF) said it was looking to help hard-pressed customers who are facing genuine difficulties.

Under the plan, those unable to meet repayments are asked to talk to their lender as soon as possible to agree some sort of arrangement that would prevent their home being repossessed.

But the IBF - which represents the country's main mortgage lenders - said the deal will have to be acceptable to them and will be looked at again every six months.

"The basis for such solutions is for the customer to talk to his/her lender at the earliest opportunity so that a mutually-acceptable arrangement can be agreed, implemented and reviewed thereafter on a six-monthly basis," it said in a statement. "Provided the customer maintains this arrangement, IBF mortgage lenders will not initiate any form of legal action against them in relation to their mortgage."

The Money Advice and Budgeting Service will have a representative on an oversight committee monitoring the process.

Under the law, lenders must already wait for at least six months - or one year in the case of Bank of Ireland and AIB - from the start of arrears before applying for a repossession. They are also required to help struggling borrowers and consider options including payment deferral, an extension on the term of a mortgage, changing the type of mortgage or capitalising arrears and interest.

The IBF claims there is a low level of repossessions in Ireland, with main mortgage lenders seizing 70 homes in the first half of this year. It said 49 of these were voluntary repossessions or the home was abandoned.

Finance Minister Brian Lenihan said he welcomed the intention of banks and building societies to offer reassurance to homeowners having difficulty with their mortgage repayments. "Home repossession generally is the last resort for the lender and we want to keep it that way," he said. "A better method of dealing with arrears cases is early intervention and engagement between lender and borrower."