Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I should like to clarify if my understanding of this is correct. Before the Finance Bill is enacted the specified rate on home loans is 5%. If an employee has a home loan, through his or her employment, for less than that rate, 4.7% or 4.8%, that is deemed to be a preferential rate and he or she pays a benefit-in-kind on the differential. That is the existing position. I would not regard a rate of 4.7%, 4.8% or 4.9% as being preferential at this point in time. It is not. Generally speaking, the others are between 4% and 4.5%. I would regard 4% as a better benchmark of what might or might not be preferential at this point in time. That could change in the next 12 months. Certainly, in terms of where the market is today, charging benefit-in-kind on an employee who is paying 4.9% on a home loan rate is not reasonable, so that what the Minister is doing makes sense.