Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

The Government fully accepts the increase in interest rates together with the general increase in the cost of living is causing real problems for some mortgage holders. We have addressed economic challenges in recent years, in particular, through Brexit and Covid, and we now can address the latest challenges arising from the need to tackle high inflation.

The Government is acutely aware that the rising cost of living over the past year has posed significant challenges to households and firms. We have responded swiftly and decisively on multiple occasions to help offset the most severe impacts of inflation, with particular focus on protecting the most vulnerable. Overall, €12 billion in direct relief has been made available to counter the effects of inflation.

The previous version of mortgage interest relief cost approximately €280 million in 2005, rising to more than €700 million in 2008. Therefore, the reintroduction of mortgage interest relief, even on a selective or tailored basis, is likely to involve significant cost and needs to be considered not on an ad hoc basis, but in the context of a range of cost-of-living measures being provided. The Minister for Finance and the Government have made it clear that the budget is the appropriate time to decide on how best to deploy available resources to support those affected by cost-of-living pressures.

As public representatives, we receive correspondence and representations, which outline the difficulties borrowers are now facing. These difficulties can and should be addressed in an open way by both the lender and the borrower. When proper engagement takes place on both sides, fair solutions can be reached and put in place. In response to an initiative by the Minister for Finance, the industry has brought forward some additional measures to support customers. These should now be actively implemented by various mortgage lenders and services, and have the potential to benefit some borrowers.

We welcome in particular that the main non-bank mortgage lender is now offering the possibility of fixed rate alternative repayment arrangement options to borrowers who are in the Code of Conduct on Mortgage Arrears, CCMA, mortgage arrears resolution process. On mortgage lending and switching, we have for the first time an agreed industry-wide set of initial eligibility criteria to facilitate people switching their mortgage from a non-bank to a bank. All of the banks and some of the other lenders, like Avant Money, ICS and Finance Ireland have signed on to that set of criteria, and it is an important breakthrough. It is important to send out the message that those whose mortgage is with the non-bank sector, and who feel they are a good candidate to have their mortgage switched can pursue that option. It many not be a solution for everyone, but it can be an option for some borrowers. It will now be up to the industry to demonstrate that borrowers can avail of this option.

The new measures are additional those provided for in the existing regulatory framework. The Central Bank is clear that it expects all regulated firms to be ready to assist their customers facing mortgage repayment difficulties, to be ready to work with them and, where necessary, to offer appropriate arrangements to enable them meet their mortgage obligations. This consumer protection regulatory framework is important, but it is also appropriate to keep it under review to ensure it comes to provide the appropriate protections to consumers.

The Central Bank protection code is a key part of the overall consumer protection regulatory framework. As Deputies are aware, the bank is currently undertaking a comprehensive review of that framework. Last July, the Central Bank published an update on the engagement it had so far with stakeholders and it expects to publish a consultation paper setting out the proposed changes in the code in December. Following this the Centra Bank expects to publish the revised consolidated code next year, which can be set down in regulations made by the Central Bank. The revised code will be designed from the perspective of the consumer, and consumers will be able to determine both the general protections available to them and protections specific for different types of financial services.

Separately, the Department of Finance has recently published the consumer protection roadmap. This aims to bring together in one place information on the wider range of consumer protection policies, at Irish and EU levels, and which are being developed and implemented in coming years to deal with the changing landscape of the provision of financial services.

Finally, the Central Bank consumer protection framework is also supported by further measures taken by the Government. We have introduced and implemented significant personal insolvency legislation and reform aimed at ensuring debtors can deal with their unsustainable debts in a way that will allow them to remain in their homes. If necessary, a fair debt restructuring arrangement can now be implemented against the will of the mortgage creditors subject to the approval of the court. Likewise, the Abhaile scheme, which provides free expert financial, legal advice and assistance, is in place to help borrowers in mortgage arrears. The Government recently decided to extend the scheme for a further four years. The scheme has proven critical in terms of supporting families who find themselves in serious long-term arrears and are at risk of losing their homes. More than 26,400 households have been supported since the scheme was set up in 2016. The scheme is delivering real benefit to households, and 85% of households who availed of support under Abhaile either have a solution in place or are on a path to doing so.

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