Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move:

That Dáil Éireann: notes that:

— the European Central Bank has increased its main lending rate for the fifth time, to a rate of 3 per cent, having been 0 per cent last June;

— approximately 200,000 tracker mortgage borrowers are facing immediate and significant increases in their mortgage repayments;

— approximately 65,000 mortgage borrowers with mortgage contracts held by vulture funds are facing immediate and significant increases in their mortgage repayments, with many now charged interest rates of more than 7 per cent;

— it is anticipated that retail banks will increase their fixed and variable rates in the period ahead, with other borrowers now facing the prospect of higher mortgage repayments; and

— these interest rate hikes will exact further financial pressure on borrowers that are already facing higher costs and lower disposable incomes as a result of the cost-of-living crisis;

further notes that:

— the Taoiseach previously stated that homeowners whose mortgages were sold off to vulture funds would be no worse off than those whose loans were owned by retail banks;

— the Minister for Public Expenditure, National Development Plan Delivery and Reform previously stated that he would be happy for his mortgage to be sold to a vulture fund; and

— mortgage borrowers whose loans were sold to vulture funds are now facing interest rates that are significantly higher than those charged by retail banks, resulting in significant financial pressure for them, proving the assurances of the Taoiseach and the Minister for Public Expenditure, National Development Plan Delivery and Reform to be nothing more than empty platitudes;

acknowledges previous statements made by the Minister for Finance, Michael McGrath TD, in 2015, when he said in reference to Mortgage Interest Relief "this payment is a very important support for families - the process of withdrawing it from existing homeowners at the same time as they are subject to a residential property tax highlights a Government that is pursuing policies that are making home ownership increasingly unaffordable for families";

agrees with Minister McGrath's then assessment and considers it an apt description of the policies of the current Fine Gael, Fianna Fail and Green Party Government; and

regrets Minister McGrath's U-turn on this issue, as confirmed by his statement last week that he has no plans to introduce a mortgage interest relief scheme, despite his previous calls in opposition, which suggests that neither Fianna Fáil or Fine Gael can be trusted to support homeownership or homeowners; and

calls on the Government to:

— offer hard pressed families real support, not empty words;

— introduce timely, targeted and temporary mortgage interest relief, to support homeowners facing significant increases in their mortgage costs;

— provide mortgage interest relief equivalent to 30 per cent of increased interest costs relative to June 2022 up to, but not exceeding, €1,500 per annum;

— work with the Central Bank of Ireland to enhance the supervision of vulture funds in the interests of struggling borrowers; and

— examine the taxation of the banking sector, including the treatment of Corporation Tax loss relief.

Since the cost of living crisis took hold, households have chased every possible avenue to cut costs, but there comes a time when there is nothing left to cut. So many households find themselves now in this position. For mortgage borrowers, the cost-of-living crisis has opened a new front. At the end of 2021 inflation soared, driven by supply chain disruptions as pandemic restrictions were lifted across the globe, and was further turbo-charged by Russia’s illegal invasion of Ukraine. Since the summer of last year, the European Central Bank, ECB, has responded to inflation by hiking its interest rates. So far, its main lending rate has risen by 3%. This is the most severe round of interest rate hikes in decades. The impact will be acute for many. It has been immediate for some, with their mortgage repayments set to rise by thousands of euro this year. A new source of anxiety is bearing down on them. Another blow, another drop in their living standards, another squeeze on their disposable income. Now is the time to introduce timely, targeted, temporary mortgage interest relief to support them.

There are over 700,000 outstanding mortgage accounts on primary or family homes. We know that the interest rate hikes by the ECB are impacting mortgage borrowers differently. Retail banks have not yet passed on these rate hikes in full to their variable and fixed rate customers, but they have started with further rate hikes expected in the time ahead. For the almost 200,000 borrowers on a tracker rate, the impact is significant and immediate. To give an example, a borrower on a tracker rate with €150,000 outstanding on their mortgage will see their monthly mortgage repayments rise by more than €2,600 this year.

There is also another category of borrowers, many of whom are with a lender they did not want or choose to be with. Those are mortgage loans that were sold off to vulture funds. There are more than 100,000 Irish families, borrowers whose mortgages are now held by non-banks, 65,000 of which are on variable or tracker rates. Vulture funds are now hiking their rates aggressively, with many borrowers facing interest rates as high as 7.5%. They have no option to switch or to fix their rate. Many of these vultures offer no alternatives.

I was contacted recently by a mortgage borrower, Rachel, whose mortgage was sold by Permanent TSB to Start Mortgages. She is a full-time carer for her son, who has cerebral palsy. By January she had received four letters from Start Mortgages, each informing her of a further rate hike. She will be paying over €4,000 in additional interest this year compared to last year. In her own words, Rachel tells me:

Hikes across the board from diesel, electricity, gas and food are barely sustainable, but to have the constant fear every month of the next increase coming and how to finance the previous month's increase, is inhumane. It has become the norm now, that due to this severe financial strain on us, we have to now pick and choose what therapies and hospital appointments we can afford for our son to attend.

Those were Rachel's words. Another borrower who contacted me has her mortgage held by Pepper. She is a single parent. She will be paying €2,800 in additional interest as a result of these rate hikes. In her own words, she says:

I have no option to fix. I work part-time in order to bring my kids to school. This is causing me huge stress and anxiety. I am in fear of further hikes.

Many households now face, as the stories of real lives I have relayed make clear, acute financial pressure. They have received three, four and five letters through the door and face the prospect of a sixth next month, when the ECB hikes its interest rates again in four weeks' time. For many families, the ability to pay the mortgage is just as crucial as the ability to pay the rent or the energy bill. The alternative to them, of not doing so, is arrears, increased debt and financial insecurity. For all of these reasons, it is time to introduce timely, targeted and temporary mortgage interest relief to support those borrowers who are and will continue to struggle as a result of increased interest costs. I call on the Government to act and for this Dáil to support our motion to reintroduce mortgage interest relief at a level of 30% of the additional interest charged since last June, up to a maximum benefit to an individual of €1,500.

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