Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

There is no doubt but that the cost of mortgages represents an extraordinary burden on thousands of families, many of whom see no light at the end of the tunnel. Some 96,000 households are in mortgage arrears for more than three months. The personal insolvency arrangements, in terms of the resolution of the issue of household debt, give complete control to the banks. To add to all of this misery and people's genuine anxiety, the State owned banks, Allied Irish Bank and the Educational Building Society, have decided to increase their variable mortgage interest rates by 0.4%. This is a devastating blow to many mortgage holders. The cost of this increase on a mortgage of €300,000 will be approximately €800 per annum, which is a savage increase for many and will cripple family budgets. This represents a cynical profiteering ethos within these institutions which, in terms of their particular agenda, are making sacrificial lambs of variable interest rate mortgage holders. This is a sneaky rise in advance of an anticipated European Central Bank cut next week.

Many are asking questions such as, "Is anybody going to do anything about it?" and "Is the Government indifferent to the plight of those mortgage holders who will suffer significantly as a result of this hammer blow announcement yesterday by AIB, the EBS and Haven?" The 2011 Central Bank report on variable interest rate mortgage pricing in Ireland states:

It appears that some lenders are charging higher variable rates to compensate for the losses they are making on their tracker loans. The risk with such a strategy is that it may be counterproductive and continue to exert upward pressure on arrears.

There is no doubt but that this increase will add to the number of families in arrears. When one takes into account the property tax and other charges, the situation is looking impossible for many families. This increase will lead to more families in mortgage arrears.

Will the Government intervene in this matter? Will it meet the banks to ask them to reverse this savage increase in variable interest rate mortgages?

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