Mortgage borrowers are getting “screwed” by banks who should be forced to change their variable rates by the Government, the Dáil has heard.
Taoiseach Enda Kenny said he expects banks to reduce their variable mortgage rates, which in some cases are double the rates than other European countries.
He said he expects variable rates to fall below 4% across the board and that if they don’t, Finance Minister Michael Noonan has options open to him in the budget.
The demand for lenders to reduce variable mortgages comes as the deadline imposed by Mr Noonan on the larger banks to make changes passed yesterday, with most having ignored the finance minister.
Mr Kenny said more conversations would be had with lenders in the coming weeks and more meetings between Mr Noonan and the banks were planned for September.
Fianna Fáil leader Micheál Martin said borrowers were being “screwed” as he questioned “what planet” Mr Kenny lived on.
“It’s about money in people’s pockets... it’s a massive rip-off,” he said.
The Department of Finance confirmed that Mr Noonan has issued more letters to the six main banks in recent days seeking progress on overhauling rates.
A number have already changed rates, but not necessarily variable mortgage charges.
Mr Kenny rejected claims that Mr Noonan’s initiative to tackle high rates was a failure and instead said yesterday’s deadline was “a first date” for the banks.
The only bank that has offered a drop in its variable rate is AIB, whose move came before Mr Noonan’s demands.
Fianna Fáil’s finance spokesman, Michael McGrath, also dismissed lenders moving borrowers from variable to fixed rates. “A fixed rate is not suitable for all 300,000 variable rate customers in the country,” he said.
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