Tom Fleming (Kerry South, Independent) | Oireachtas source

The new mortgage rates in the country are among the highest in Europe. This means first-time buyers are paying up to €2,500 a year more for mortgages than their counterparts in France, Italy and Holland. The interest rates here are still higher than most of those imposed for property buyers in the other 18 countries in the eurozone even after recent cuts by Bank of Ireland and Permanent TSB. The cuts by those two banks were for new borrowers and those switching to them, but mostly not for existing customers. There has been a string of reductions in the main rate charged by the European Central Bank, which is now at a record low of 0.05%, but no decreases have been passed on to those in this country with tracker mortgages or on the new mortgage rates and the existing variable rates charged by the banks to established customers.

The Central Bank issues figures for the interest rates charged for new mortgage business, but these figures are distorted by the inclusion of the old tracker rates for those who have had their mortgages restructured. Publishing such official mortgage rates discourages new lenders coming on to the market and the reality is that mortgage interest rates are 2% higher than in the rest of the eurozone. On a €200,000 mortgage a new Irish borrower is paying around €2,500 more than for a mortgage elsewhere in the eurozone. Repayments on a German €200,000 mortgage work out at €819 a month, far lower than in this country.

On the regulated market lenders must act honestly, fairly and professionally in the best interests of their customers. For the integrity of the market the Government must act immediately in tandem with the Central Bank, which is not implementing its consumer protection code, in order to stop the fleecing of existing variable rate mortgage holders by the banks' actions. We are well aware that they are only further boosting their profitability.

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