Maurice Quinlivan (Limerick City, Sinn Fein) | Oireachtas source

In the midst of a cost-of-living crisis and a dramatic rise in costs for consumers of utilities such as gas and electricity, it will be a bitter blow for mortgage holders when interest rates rise again. We have a housing crisis, with people struggling to get on the property ladder. For those who own their homes, mortgage repayments that are already difficult to meet will become that much harder to maintain. Owning your own home takes plenty of sacrifice and hard work. Those who have worked extremely hard and saved and sacrificed to own their own homes are often left with very little disposable income. The remainder has already been eaten into by price rises and these interest rate increases. Many will be left with next to nothing in the pot for those moments and experiences that mark the difference between existing and living.

In Limerick, the average cost of a three-bedroom semi-detached home is almost €300,000. These rate increases will mean the repayments will be that little bit harder every month. The interest rate hikes expected in March will see them rise from 3% to 3.5%. This is a significant rise that will be felt in the pockets of homeowners. The departure of Ulster Bank and KBC has forced hundreds of thousands of customers to switch their bank accounts. These departures have also led to a less competitive mortgage market. Depending on what lending institution people are with, the interest rate hike will be applied differently. People are already paying over the odds for their homes. The average tracker rate has increased from 1.15% in June 2022 to 4.15%. To put this increase in monetary terms, for a mortgage payer it equates to an increase of €220 per month on an outstanding balance of €150,000 with 20 years left on the mortgage. This is not an insignificant amount.

There are, of course, borrowers whose mortgages are in the hands of vulture funds. They have no option to fix or switch. Their interest rates have risen to more than 7%. Coupled with the dramatic cost-of-living increases, the squeezed middle will get squeezed just that bit more. The combined effects of the utility price increases, food price increases and mortgage interest rate increases are impacting on citizens of the State. Something must be done to alleviate their hardship. To this end we need a targeted and temporary intervention of mortgage interest relief.

What we propose is sensible and fair. We propose to provide relief on a proportion of mortgage holders' increased interest cost relative to the rate in June 2022. Importantly, we believe this should be a temporary measure in response to the current cost-of-living challenges. It should be targeted and it should be for the primary dwelling only.

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