– Intervention needed to create a fairer system for variable rate customers –
Fianna Fáil TD for Cavan-Monaghan Brendan Smith says his party’s Bill on mortgage rates will force banks to ensure that the rates that they charge are fair and proportionate to rates across the EU.
Deputy Smith made the comments following last week’s Dáil vote which saw Fianna Fáil’s ‘Central Bank (Variable Rate Mortgages) Bill 2016’ progressing to Stage 2 for further consideration by TD’s. This is the third time that Fianna Fáil has sought to address the inequalities in the mortgage market.
“There are hundreds of families across Cavan and Monaghan who are struggling with unfair mortgage rates. Some mortgage holders are paying up to €4,000 a year more in interest than customers with comparable mortgages in Northern Ireland and other European countries. This is deeply unfair and something which my party has been trying to address over the past number of years.
“Under our new legislation, the Central Bank would be required to carry out an assessment of the state of the mortgage market, taking into account factors such as the banks’ cost of funds, reasonable profit expectation, concentration within the market, the ease with which borrowers can switch mortgages between lenders and extent to which they are switching.
“We are committed to ensuring that mortgage customers in Ireland get a fair deal. Over the past number of years banks have been quick to pass on interest rate increases when their cost of borrowing rose, however they have failed to reduce rates in the aftermath of unprecedented ECB rate cuts. This needs to change so that families are given a break.
“This is an important Bill, which will mark a sea-change in the relationship between banks and their customers, and will give mortgage holders more protection against rip-off practices. I’m glad the Government and other opposition parties have seen the merits of the Bill and have allowed it to progress through the Oireachtas. This is something which we will continue to pursue over the coming months,” concluded Deputy Smith.