Mortgage bill ‘makes matters worse’

A senior Central Bank regulator has said there are good reasons Irish banks charge homeowners among the highest rates in the eurozone for their standard variable mortgages, saying a Fianna Fáil bill which is backed by most opposition TDs could make matters worse.

Ed Sibley, director of credit institutions supervision, told the Oireachtas Finance Committee the average Irish mortgage rate excluding tracker mortgages, at 3.78%, was justifiable because banks here had to tap more expensive wholesale funds, faced much higher risks of borrowers defaulting on their loans and had higher costs too.

Mr Sibley said that the Variable Rate Mortgages Bill — sponsored by Fianna Fáil finance spokesman Michael McGrath — “may have the entirely unintended effects of stifling competition and innovation and dissuade entry of new participants to the Irish market.”