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

I am sure the Taoiseach will agree that for many families the most significant financial outlay is their monthly mortgage payment. It has a huge impact and can create enormous pressure in their lives. We have a situation where over 300,000 households are on standard variable rate mortgages which clearly are exorbitant and exerting enormous pressure on their capacity to sustain their lives from a financial perspective. It is very clear that the rates being charged are far in excess of the cost of bank funds. A typical €200,000 standard variable rate mortgage holder, for example, is paying €6,000 more per year than a borrower with a tracker mortgage. I am sure the Taoiseach will agree that this is simply unsustainable. Given that there is a figure of approximately €40 billion for standard variable rate mortgages, a 1% reduction in interest rates would equate to a benefit of an estimated €400 million to households across the country. Even a 0.5% reduction would equate to a benefit of around €200 million which would provide enormous relief for the families concerned. It would put issues such as the property tax and water rates in the ha'penny place in terms of the actual financial impact on such families who are the most hard-pressed in the country. It is very difficult to justify the high rates charged for standard variable rate mortgages when one looks at the cost of funds. AIB is charging a rate of 4.15%, while Bank of Ireland and permanent tsb are charging 4.5%, but the cost of funds is 1.64%, 1.15% and 1.74%, respectively. The variation is huge and in stark contrast with the rates in other eurozone countries. Customers in Ireland on the standard variable rate are paying up to 2% more than their counterparts in the eurozone. Banks which operate in both the Republic of Ireland and the North are charging their customers here on such mortgages 2% more than in Northern Ireland.

We raised this issue in a debate during Private Members' time over two weeks ago when our finance spokesperson, Deputy Michael McGrath, pressed the Minister strongly in what was a comprehensive and constructive presentation by our party, particularly in terms of providing solutions to the problem. However, the Government has not stepped up to the plate and there has been very little engagement on the issue. Essentially, the Government has given the banks free reign in how they operate and impact on customers. Has the Taoiseach met the banks specifically on this issue? Has the Economic Management Council raised it with the banks? From what we can see, it has not met the banks since 2012. What is the Government proposing to do to alleviate the enormous, unacceptable and unfair pressures on families?

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