McGrath calls on banking sector to give more support to struggling mortgage-holders

'With the rapid change in the interest rate environment, industry must engage with their customers to prevent them falling into arrears, Finance Minister said

Finance Minister Michael McGrath said he was 'acutely conscious' of the impact rising interest rates were having on mortgage-holders. Picture: Sam Boal /RollingNews.ie

Finance Minister Michael McGrath said it was now “necessary” for the banking industry to show it was supporting mortgage-holders in difficulty following a raft of interest rate hikes over the last year.

It comes as new data shows eurozone inflation stopped slowing in August ahead of a meeting of the European Central Bank (ECB) next month to discuss further interest rate hikes.

Mr McGrath made the remarks following a meeting with representatives of the banking and mortgages sector.

He said he was “acutely conscious” of the impact rising interest rates were having on mortgage-holders, many of which are worried about their ability to make their repayments now and into the future.

“I believe that the vast majority of mortgage holders in Ireland are making a genuine effort to pay their mortgage. There are supports available and with the rapid change in the interest rate environment, industry must engage with their customers to prevent them falling into arrears,” Mr McGrath said.

It will now be necessary for the industry to demonstrate that they are delivering for borrowers in difficulty with support and certainty, and developing long-term sustainable solutions for borrowers.” 

Mr McGrath said he asked industry representatives to set out their response to this issue as a priority.

The meeting included chief executives and senior representatives of retail banks, retail credit firms, the Banking and Payments Federation Ireland (BPFI), as well as the Central Bank, among other organisations.

BPFI chief executive Brian Hayes said its members were working closely with the Government and Central Bank on this issue and “will continue this engagement” in the coming months ahead to support borrowers in this difficult economic environment.

Since July last year, in a bid to stem inflation, the ECB has tightened monetary policy at the fastest rate in its history, but prices continue to rise.

Prices across the eurozone rose 5.3% compared to the same period last year, which is well above the ECB’s medium-term inflation target of 2%.

The lack of improvement on inflation likely points to another interest rate increase next month, heaping further pressure on struggling homeowners.