Minister For Finance Called To Secure More Progress On Interest Rates

Fianna Fáil has called on Minister for Finance, Michael Noonan, to "insist on much more progress", on variable mortgage interest rates during a series of meetings with Ireland's banks next month.

Michael McGrath, Fianna Fáil spokesperson on finance, made the call following the publication by the Central Bank of the June Retail Interest Rate Statistics for June 2015, which shows that variable rates in Ireland remain at twice the level of the euro area.

"Despite the spin from government, the harsh truth is that up to 300,000 existing variable rate mortgage customers are still paying dramatically over the odds for their mortgage," Deputy McGrath said.

"Banks will point to new offers on fixed rates and loan to value products but the truth is these products are only suitable for certain customers. The variable rate mortgage product – as a product in itself – should be priced competitively and appropriately by each bank and this is simply not happening.

"Minister Noonan has promised to meet the banks again in September prior to the Budget. He shouldn’t be fooled by press statements from the banks into thinking that great progress has been made on variable interest rates. Sadly, progress has been minimal. As soon as international interest rates begin to rise, I don’t believe the banks will need to be asked twice to hike up their variable rates. Fianna Fáil remains of the view that legislation is required to give the Central Bank the power to intervene when a market failure has occurred as is the case presently in the mortgage market.

"The continuing rip-off of variable rate customers comes against the looming abolition of mortgage interest rate at the end of 2017. This relief, which by definition, is of most benefit to those paying the highest interest rates, currently gives an average annual benefit of €850 to 325,000 families."


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