Barry Cowen (Laois-Offaly, Fianna Fail) | Oireachtas source

For some months we have been pointing out that Irish families with variable rate mortgages are being charged 2% more than their European counterparts. For example, on an average mortgage of €200,000, they are paying €4,000 more than somebody living in France or Germany. We have called repeatedly on the Government and the Minister for Finance, Deputy Michael Noonan, to get the banks to reduce these rates but, unfortunately, to no avail. Other than AIB which dropped its rates by 0.75%, no other bank has reduced its standard variable rate mortgage. The banks' response has been as inadequate as that of the Government. The mantra from the Minister is that competition will fix it. He has encouraged people to switch banks, but competition alone will not solve this ongoing crisis. Only 712 mortgage customers switched banks in 2015, allegedly from a pool of 100,000. That in itself represents the weak, competitive nature of the mortgage market in Ireland and also illustrates that the Government is suggesting a solution that it knows is not working. Even the Central Bank accepts that there is a problem, while the Minister has washed his hands of the matter. That is unfair and unjust on families who are paying €4,000 more per year than their European counterparts. He said he wanted to wait and see if competition between the banks would decrease the rates offered. Obviously, that wait and see approach is not working and I contend it will not work. It is even harder to stomach when people read that the Exchequer is enjoying unprecedented profitability, with various windfalls, while families are struggling to pay this extra €4,000 on top of what should be their normal mortgage repayments. Does the Tánaiste believe it is fair that banks are charging Irish customers a rate that is up to 2% higher, or €4,000 more per year, on their variable standard rate mortgages? Does she agree with the Central Bank that this is a major problem? Can she honestly say she agrees with the wait and see approach to the issue adopted by Government for close on 12 months?

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