Fianna Fáil to challenge mortgage charges

Fianna Fáil finance spokesman Michael McGrath says he will table a new mortgages bill this evening to rein in what he describes as the still “excessive” standard variable home loan rates being charged by lenders.

The bill envisages giving the Central Bank powers to intervene in the mortgage market if it identifies “a market failure” though it does not explicitly set a ceiling on the interest rate than any lender should charge.

AIB and KBC Bank last week cut their home loan rates, but a senior Fianna Fáil spokesman said that many standard variable rates being charged across the Irish market were still too high and exceeded the rates charged by lenders across the eurozone.

Consumer advocates have long claimed that retail mortgage rates here are not justified in relation to the wholesale costs for the banks, but the Central Bank has said it does not want the powers, saying it fears any intervention would drive off potential new lenders and competition.

“The purpose of the legislation is to tackle what Fianna Fáil regards as excessive standard variable rates being charged to mortgage holders around the country,” Mr McGrath told the Irish Examiner.