Up to 27,000 mortgage holders could save themselves more than €10,000 if they switched, according to the Central Bank, which also vowed to crack down on seductive but misleading mortgage adverts from lenders.
More than 100,000 mortgage holders could save themselves money, the watchdog said, as it promised changes to the Consumer Protection Code 2012 to help consumers choose different options.
Analysis of over half a million mortgages found:
- Up to 21% of borrowers could save money by switching.
- Approximately 16,000 could save over €1,000 in the first 12 months.
- Around 27,000 could save more than €10,000 over the lifetime of the mortgage.
The Central Bank has cracked down on lenders over mortgage advertising, with 75% of advertisements reviewed in an analysis of lenders ordered to be withdrawn or amended.
Fianna Fáil finance spokesman Michael McGrath said the Central Bank’s “modest” measures should have been stronger: “They have acknowledged that people find it difficult to compare mortgages and yet they continue to allow banks to offer ‘cashback’ incentives that dazzle consumers.”
Central Bank director of consumer protection, Gráinne McEvoy said: “Some of the reasons people don’t switch are because they don’t realise how much money they could save, and also find it difficult to compare mortgages.”
All lenders will have to provide a comparison of total interest payable on an existing mortgage, the interest payable on the new mortgage, or alternative interest rate on offer by that lender. They will also have to allow consumers to compare potential mortgage switching savings from other lenders.
Meanwhile, AIB’s chief executive Bernard Byrne will tell the Oireachtas finance committee today all tracker mortgage victims will be contacted and given compensation by September.
Mr Byrne will claim AIB “acted swiftly and in good faith” to address the scandal.
He will also say that more than 11,000 AIB customers are facing mortgage arrears of more than 90 days and that the bank is attempting to put forward measures to assist those involved.
© Irish Examiner Ltd. All rights reserved