Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy. We understand the ECB will make an announcement on interest rates today. We do not know what it is going to be but it is anticipated there will be a further increase interest rates announced. We hope it is the last one, or failing that, the second-last one. As the Deputy will appreciate, the ECB is independent in its functions and it has a particular remit to bring inflation under control and down to something around 2%. That is the reason interest rates are being increased by the ECB but obviously this is going to be extremely unwelcome news for mortgage holders and other borrowers, who will see the cost of their repayments rise and that is coming at a time when the cost of everything is rising. I am conscious it is going to be unwelcome news and difficult for many families and other borrowers in the period ahead.

To answer the Deputy's question, we do not have any plans at present to reintroduce mortgage interest relief. It existed in the past but did so, generally speaking, at a time when interest rates were much higher than they are even now. It is not something we will rule out for the future but there are no current plans to do so. It would involve reopening the budget and all the consequences that would derive from that.

When it comes to variable interest rates, it is a commercial decision of the banks and other lenders to set those and they will have to take into account a number of factors. When interest rates go up, the cost of borrowing for banks goes up as well, because banks get a lot of their finance from the ECB and there could also be an impact on deposit rates too. However, my message to the banks is they should not use rising interest rates as an opportunity to increase profit margins, and that is the message we will convey to them with regard to interest rates. It was the case for a very long time that interest rates paid by Irish borrowers were very much higher than the European average. We have seen that narrow in recent months because many of the banks have not passed on the increases, which is welcome.

When it comes to funds I will have to talk to the Minister for Finance and then come back to the Deputy. My understanding is when loans or mortgage transfer the contractual terms remain the same and cannot be changed unilaterally. Provided the person adheres to the contract the lender must honour the contract, but the Deputy is telling me that is perhaps not the case. Certainly, if he has individual cases or examples, I would be happy to examine them and take them to the Minister for Finance for further examination.

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