Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 12:

In page 65, between lines 8 and 9, to insert the following: “Report on mortgage interest relief

24.The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the introduction of targeted, tailored and time-bound mortgage interest relief in respect of primary dwelling homes, considering options for its design, in the context of sudden and significant increases in interest payable on mortgage loans.”.

This amendment calls for a report to be laid before Dáil Éireann on the introduction of targeted, tailored and time-bound mortgage interest relief in respect of primary dwelling homes, considering options for its design, in the context of sudden and significant increases in interest payable on mortgage loans.

As the Ceann Comhairle will be aware, on 14 September the ECB increased its interest rate by 75 basis points, which is three quarters of a percentage point, to bring it up to 2%. This was the third interest rate hike since July and unfortunately others are expected in the coming months. Some of this has had an immediate impact on mortgage holders, especially those with tracker mortgages. Those who have had their mortgages sold on to vulture funds and other non-retail banks have seen this passed on immediately. Others have increased the fixed rate and may still increase the variable rate. We know 54% of outstanding mortgage balances are on variable mortgages, and as the Central Bank says, they will likely see an immediate increase in mortgage interest costs when rates rise. It also notes that even for fixed-rate mortgages, fixation periods are relatively short, meaning borrowings would be refinanced at higher rates after a relatively short period of time.

I would like to consider those who have had this impact passed onto them, including all of the people on trackers and all of those who had their loans sold to vultures and so on. Even though countless Ministers for Finance have told us it does not matter who holds a person's loan, it does matter today. People have seen their loans sold from AIB to a vulture. AIB has so far absorbed the variable rate and so has Bank of Ireland. Vultures have not. They have passed on these rate increases. This means if a person has a €200,000 loan, they will see their repayments increase next year by €2,000.

Many Deputies in this Chamber and on the Government benches are landlords. I note that landlords are able to offset mortgage interest against their tax so there is 100% relief for landlords. That does not exist for somebody who has their primary dwelling, is paying a mortgage and is now seeing their interest rate increase by 2%, which is an annual increase of about €2,000. They do not have anywhere to go. They used to, as we had mortgage interest relief up until 2021. The Government should take a pragmatic and reasoned approach, which is something it has not done so far, and get the Department to consider and publish options for the design and introduction of a relief. We in Sinn Féin are working with the Parliamentary Budget Office on costing models of this but it is something the Department should do. We have been clear that the banks should be absorbing the interest rate hikes in the interests of their customers. Obviously, that is not the case with trackers as they are pinned to the ECB rate but with variable rate mortgages I encourage the banks to continue to absorb the interest rate hikes in the interests of their customers.

This is about trying to ensure people are not fully insulated because we are not talking about that. The design I have in mind is looking at the proportion of increase that has happened. It would not look at all the interest that is paid but at the proportion that has increased over the past year. I suggest that a portion of that would supported by the State, similar to the energy credit, for example, where you can have an upper limit for what can be availed of by an individual or a householder. This is a reasonable approach. I suggest to the Minister, despite the fact his Government has stood against this idea, that it is time to do something for hard-pressed homeowners who have seen a shock 2% increase in the cost of the mortgages on their homes. When the bills must be paid, it does not matter to an individual whether it is a €2,000 increase in the cost of heating their home, the cost of electricity or the cost of the mortgage. This is a shock for people. The State should look at dusting down the type of measure we used to have, refining it for the times we are in, and having a tailor-made, targeted and time-bound measure that brings back mortgage interest relief.

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