Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I move: "That the Bill be now read a Second Time."

We initiated this Bill last year, 2023, in response to ten interest rate hikes by the European Central Bank, ECB, which impacted tens of thousands of mortgage holders in this country. These are working people who are trying to put a roof over their heads and they were hammered again and again by interest rate hikes by the European Central Bank. In the period between July 2022 and April of this year, we saw interest rates climb from 0.5% to as high as 4.5%. That led to enormous increases in the repayments people have to make, impacting in particular those whose mortgages are held by vulture funds and those whose mortgages are held by bank lenders but who have tracker mortgages that track the ECB rate, variable rate mortgages or mortgages where the rate is only fixed for a year or so and then becomes variable. All these people were vulnerable to, or actually hit by, shocking increases in interest rates.

Some 700,000 people have mortgages, of which 95,000 are with vulture funds. Some 200,000 people have tracker mortgages, of which 35,000 are with vulture funds and 165,000 with banks. There are 186,000 mortgage holders on variable rates. That is an enormous group of people, tens of thousands of people, who have been hit by these interest rate hikes. As a result, many people are in trouble. To be precise, 47,734 mortgage holders are in arrears, of whom 29,000 are in arrears of more than 90 days and 60%, or 17,420, are in arrears of more than a year. Many people are struggling with the impact of these interest rate hikes. That is in the context of a wider cost-of-living crisis where we have seen hikes in energy costs, rents - if you have a mortgage, rent increases do not necessarily affect you, I suppose - and other increases in grocery prices and so on have an impact, along with cuts in the value of people's incomes in real terms because of inflation.

I will speak about a few instances I am aware of to give some flavour of the impact. One of my constituents who is a single working mother was paying €1,170 per month on her mortgage in 2020. She is currently paying €1,965. At its peak her payment went up to €2,009 per month. There was a 0.25% reduction in the ECB rates recently, but even with that tiny reduction she is still paying more than €800 more than she was paying in 2020 - that is a massive hit - and she is paying a 5.6% rate. As well as these interest rate hikes happening all over Europe, in Ireland people are paying significantly more than the ECB rates and are therefore hit even harder and more dramatically by the hikes. For those who have mortgages with the non-banks, the vulture funds are charging 6.09% on variable interest rate mortgages and 5.59% on trackers, while the banks are charging 4.07% for variable mortgages and 5.6% for tracker mortgages. Some people are paying considerably more than that.

Critically, the banks and vulture funds that are doing this are making an absolute fortune. Permanent TSB, which owns the mortgage of the single working mother I mentioned, saw its profits increase last year by 71%. That is an enormous jump in its profits. Bank of Ireland, which is the biggest mortgage lender in this country, saw its profits jump last year by 92%, up to €1.9 billion. These same banks are also depositing tens of billions of euro with the ECB, profiting from the hiked interest rates and therefore making money on the money they deposit with the European Central Bank while absolutely crucifying ordinary working people who are trying to cope with these shocking increases in their mortgage repayments to the point that for many people it is simply unsustainable. In the face of this, the Government has done almost nothing, certainly nothing that would have a significant impact on the dramatic impact people are experiencing as a result of these interest rate hikes by banks that are raking in profits.

What does our Bill do against that background? It proposes a cap on mortgage interest rates to be set at 3%, so the banks cannot profiteer and can absorb the ECB rate hikes using the enormous profits they have made, which have increased dramatically in recent years.

If the net effect of that is to drive the vulture funds out of the Irish market, we would be very happy. Some people will say these funds will not want to operate here. Good; we do not need them. In fact, I was talking to someone the other day who is an expert in this area who said that, to add to all of this, the vulture funds are now securitising some of their mortgages so that you cannot even deal with them in the way you can deal with a bank, even a bank that is ripping you off, because the funds are securitising the mortgages into bundles. They are essentially speculating with people's debts. This is another dimension to this problem. We are saying let us cap the interest rates at 3% so they become sustainable for ordinary working people and they do not find themselves in arrears and threatened with the loss of their homes.

Some people would say we cannot possibly do that. In fact, in Belgium, France and Italy, of three countries I know of in western Europe, they have reference interest rates and a mechanism whereby banks cannot charge a certain amount above those reference rates. What we are arguing for is not that radical. It is entirely doable, particularly given the profits being made by the banks. When we consider that we bailed out the banks to the extent we did, which are now making enormous profits, is it not right, fair and just that we would bail out mortgage holders who are being absolutely crucified and crippled by these mortgage interest rate hikes?

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