Marian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

Once again, we are discussing the Sinn Féin proposal to reintroduce a targeted, temporary and capped mortgage interest relief scheme for home buyers. When I spoke on this issue just over two months ago, I supported the proposal and I still support it. It is a reasonable, well-thought out proposal and it would be very much welcomed by the many families and individuals struggling with the increased cost of living and who find themselves dreading the latest notification from their mortgage provider that their interest repayments have increased again. Many families have received four, five or perhaps even six such notifications. The pace of the increase in mortgage repayments has been relentless for the past ten years.

Those same families are facing massively hiked energy bills, food bills and home heating bills. To be fair, the Government has responded with significant packages to take the edge off some of those increases. That is why the Government should seriously consider this proposal. Whatever countermotion the Minister of State puts forward, it should contain some package to help those who have been hit hard by the relentless rise in mortgage repayments. I listened to the Minister earlier, and he said these types of proposals should be made at budget time. He is right. That is the ideal time, but when last year's budget was being prepared, interest rates were just beginning to rise. Nobody could have known that those interest rate increases would continue at the pace at which they have. The Government has taken one-off measures to help those struggling with the cost-of-living increases. This is what we are looking at here: a one-off, time-bound intervention to give people a breather.

The Minister also said it is not possible for any government to fully absorb the costs. Again, he is right, but this proposal does not ask any government to absorb all the costs. It is a reasonable and a modest ask - up to 30% of increased mortgage interest costs, not 100%, not 70%, not even 50%, just 30%, which is less than one third of the increased cost, and it is capped at €1,500. That is why I believe it is a proportionate proposal and should not be dismissed because of timing or process. It should be evaluated on its merits. In previous times, mortgage interest relief certainly benefited the better off in a disproportionate manner, but this proposal avoids that trap. While it is universal in nature, in the sense that all mortgage holders can apply for the relief, it has a built-in equality mechanism in that any relief would apply to just 30% of the increase in interest rates, and it is not open ended. The maximum benefit any mortgage holder would receive is €1,500. That is just a little more than the average monthly repayment.

This proposal will also help those who are starting out on their mortgage journey more so than those who are nearing the end of their payment time. Those who are starting out will obviously have the greatest increase in interest payments and so will benefit a little more than those who have paid off most of their loan. I believe there are a lot of pluses in this proposal and it does deserve serious consideration. Of course, this proposal is not made in isolation. Our inflation levels are hovering around 8% and the knock-on impact of that is very significant, as the Minister of State is well aware, for all families when they come to purchase their daily essentials, from food to fuel. Today, we see that the price of electricity in Ireland is the highest in Europe. That is the context in which this proposal is made. It is not just a once-off proposal that sounds like a good idea. It is looking at the reality of people's lives and how they are struggling and trying to come up with a proposal that is modest, reasonable, and would make a difference to those who are paying mortgages.

Everybody knows a mortgage is a considerable chunk of money out of one's monthly income. The very significant increase in mortgage interest rates in such a short time means that every single month, mortgage repayments are increasing, with the real fear that this situation will simply continue to worsen.

These significant payment increases really hit people hard but are absolutely crucifying for those whose mortgages are held by vulture funds. Approximately 65,000 people, many in families, are paying mortgage interest at a rate of 7% or more. How helpless must those people feel? How trapped must they feel? This proposal, perhaps with a relief for just one month, would be a small window of hope. Many homeowners paid inflated prices for their homes in the first place, especially those who bought recently. Loading significant mortgage repayment increases on their shoulders at this time puts them under extreme pressure. While a significant proportion have fixed interest rates, the proposed measure is not for those people; it is for those hit by increasing interest rates.

In my constituency, Sligo–Leitrim, house prices have increased by 18% since 2021. They have increased by 14% in Donegal and a similar amount in Roscommon. Those who have taken out mortgages recently have paid a significant amount of money for their properties, and they too are under severe pressure because their incomes have not kept pace with the rate of inflation – not even close.

I have listened to various opinions on this. The Government seems to suggest enough is being done and that we should continue as we are doing; however, most people recognise that this is not sufficient. Others have expressed reservations to the effect that the taxation step is regressive. If the scheme were the old mortgage interest relief scheme, I would agree, but the proposal is capped and temporary. Yes, there would be a transfer of some economic benefit to homeowners but it would be small and designed to help those most at risk of not being able to continue paying their mortgages. While the Government's counter-motion states it will not do anything regarding this matter, I urge the Minister of State to re-examine it. Even if he does not agree with this specific proposal, he should think, now and not at the next budget, because the increases just keep coming for people, about how we can help those who are struggling with increased mortgage repayments.

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