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

I wish to raise a bread and butter issue with the Tánaiste which has a real impact on the level of disposable income of many people, the 300,000 or so, mortgage-holders who are paying a variable rate of interest which is way over the odds. The interest rates on variable rate mortgages being charged by banks in Ireland are completely unjustifiable. A person taking out a new mortgage on a variable rate can be paying anything up to 4.5% compared to a euro area average of 2.5%. For example, a person with a mortgage of €200,000, the difference in interest every year is about €4,000, that is over €300 extra per month being paid by an Irish mortgage-holder compared to a counterpart in another eurozone country. This is completely unacceptable at a time when the cost of funds for the banks is decreasing, the net interest margin is increasing very significantly and yet the cost of variable rate mortgages is not coming down, with the exception of the very welcome move announced recently by AIB.

The ECB rate reductions have not been passed on to variable rate customers and yet the Government appears to be completely disinterested in this issue. Is the Government merely a neutral bystander on this issue? Has the Government a view on the interest rates being charged by banks in respect of variable rate mortgages? Has the Government specifically discussed this issue with the banks and with the Central Bank?

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