Professor John McHale:

Variable rate mortgage holders are in a vulnerable position, particularly those in negative equity who cannot re-finance the property if banks try to push up interest rates. From a policy perspective, it needs to be examined closely. When banks come under severe pressure on profitability, partly because they are carrying tracker mortgages on the books, they will look for ways to increase profitability and variable rate mortgage holders are vulnerable. This is not something we have discussed at the council so it is my personal position as an economist rather than a council position. We have not yet come to the point where regulation is needed but it could be needed in future. Recognition of the vulnerability of variable rate mortgage holders is important.