Homeowners hit by variable mortgage rates

ALMOST two years ago I listened to an economics lecturer at Cork Institute of Technology explain the problems associated with variable interest rates on mortgages in an environment of fluctuating interest rates.

He contrasted the situation in Germany where variable interest rate mortgages are uncommon and suggested the German model would be more suitable.

Given the high level of home ownership in Ireland and the fact that the majority of mortgages here are of the variable interest rate type, it is surprising our politicians have not focused on this issue and its potential for creating problems for homeowners when interest rates started to rise.

We now have the situation where variable mortgage-holders are facing increasing inflation, increasing interest rates and exhortations from the Government that wage increases must be moderate.

If the dangers associated with variable interest rate mortgages were a suitable subject matter for discussion in economics classes, why weren’t they a subject for debate among our politicians?

Gearóid Ó Dubháin,

‘Anjuno’

Mount Oval Village

Rochestown

Co Cork