Tom Barry (Cork East, Fine Gael) | Oireachtas source

I welcome the discussion on this resolution as it is a welcome measure. Simply, it offers full relief on tax on the savings of people who want to buy a new house and as it will run until 2017, it removes pressure from people and allows them time to look for a house. There has been some criticism in regard to the 20% deposit required from house buyers, but that measure brings equity to house purchase, makes people more resilient against interest fluctuations and makes them less likely to be unable to pay their mortgages.

The benefit of less financial pressure is underestimated. Most of us have seen people who signed up for mortgages in the past under desperate pressure. The 20% measure will slow down reckless bidding, reduce the possibility of future negative equity and any restructuring required in the future will not be as bad as it would have been otherwise. A short-term sacrifice now will lead to longer-term insurance. Policy in this area creates an environment where people can work. I take issue with the Member who said earlier that a 4.5% interest rate is extortionate. In 1996 when I got my first mortgage, it was at an interest rate of 7.7% for the first five years and we were glad to get that. One can now fix one's interest rate for ten years for a small amount of money, which provides certainty in regard to repayments.

The Member said that as a result of this new measure, interest rates will increase and that rates should be fixed now at a low rate. An interest rate of 4% is a very low interest rate. I have been in business for 20 years and know that if one had a rate of 4% across the board for that time, that would give a good result.

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