Fianna Fáil renews call on Europe’s costliest home mortgages

Fianna Fáil, which is helping to prop up the minority Coalition, has pledged its controversial sponsored bill to persuade the Central Bank to place some sort of cap on variable mortgage rates will be renewed when the Oireachtas returns from its summer break.

Michael McGrath, Fianna Fáil finance spokesperson

It comes as another Central Bank bulletin again showed that the average Irish cost of a home loan at 3.3% was much higher than the eurozone average of just over 1.8%.

Official surveys have repeatedly shown Irish households and small businesses are charged among the highest interest rates in Europe, even as rock-bottom ECB rates are designed to boost the eurozone economy following the continent’s devastating debt crisis.

Experts have said the higher borrowing costs for Irish households, which are among the most indebted in Europe, and for Irish firms, which still carry huge debts from the property crash, are effectively hidden taxes on Irish people and firms.

Michael McGrath, Fianna Fáil finance spokesperson, said plans are afoot to press ahead with controls over mortgage costs. “In particular, the provisions in the bill prohibiting discrimination by lenders between new and existing customers and the proposed ban on so called cash back offers so that lenders are forced to compete on rates, both would be of significant benefit to mortgage holders,” he said.

Lenders have said in the past that around half their mortgage books are on tracker rates which are linked to currently low ECB rates. Irish bank shares fell when plans for the bill were first announced over a year ago.

Separately, other Central Bank figures showed there was €1.12bn in interest bearing balances on personal credit cards in June.


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