IFA opens new front on mortgage interest rate controversy

Farming organisation IFA and its 75,000 members yesterday opened up a new front on the controversy surrounding high rates that Irish lenders charge for mortgages, saying that politicians need also focus on “excessively high” business rates facing farmers and SMEs too.

It comes as finance minister Michael Noonan attacked a bill that Fianna Fáil says would empower the Central Bank to implement some sort of cap on the amount that lenders can charge for their standard variable home loans.

The minister said that though the Government favoured lower home-loan rates that some parts of the planned legislation “appears unconstitutional” and that the ECB would need to be consulted.

Central Bank governor Philip Lane has said that the bank doesn’t want to interfere in the mortgage market, he said.

“In addition, competition is not a function of the Central Bank, it falls within the remit of the Competition and Consumer Protection Commission,” Mr Noonan said.

Fianna Fáil, which along with Sinn Féin, had submitted similar mortgage bills last year, believes that its latest bill in the new Dáil has a good chance of getting into law following scrutiny by the new committee structure, in September.

The IFA entered the controversy yesterday, saying that all interest rates need to be scrutinised.

““The lack of competition in the Irish banking sector has led to interest rates far in excess of other EU countries,” said farm business chairman Martin Stapleton.

“As an export-dependent sector, farming and the agri-food sector is particularly affected by this. It places our farmers at a competitive disadvantage,” he said.