Pearse Doherty (Donegal, Sinn Fein)
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93. To ask the Minister for Finance if his attention has been drawn to reports that there are mortgage prisoners with vulture funds that have seen no reduction in their interest rates despite eight consecutive interest rate reductions by the ECB; and if he will make a statement on the matter. [39746/25]

Pearse Doherty (Donegal, Sinn Fein)
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I have been dealing with people throughout the State who are mortgage prisoners of vulture funds. They have seen huge interest rates being charged on their mortgages. The ECB has reduced mortgage rates on eight consecutive occasions but there seems to be no let up for those who are mortgage prisoners, and there are almost 100,000 of them. These are mortgages that are now with vulture funds. They are not reducing their rates in any significant way and, indeed, some customers have actually seen their rates increase. What is the Government going to do about this?

Paschal Donohoe (Dublin Central, Fine Gael)
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The European Central Bank increased interest rates over the course of 2022 and 2023 as a move to combat excessive inflation. Since the middle of 2024, the ECB has reduced its main official lending rate to 2.15%. While changes by the ECB generally have a direct impact on tracker mortgage rates, reductions by the ECB are only one factor that feed into the commercial decisions made by creditors in relation to other lending rates. Other factors can include the cost of funds, risk levels, contractual terms, creditor status and market competition. As a result, mortgage interest rates can vary between creditors and customers. I appreciate this is a very difficult and sensitive matter for those who have been affected by it and have seen their loan books sold. It is important to indicate to the changes on average there have been on interest rates. At the end of March the average interest rate on outstanding mortgages held by banks was 3.5%, down from 3.67% a year earlier.

For the non-bank sector, the average was 4%, down more than half a percentage point from 4.51% a year earlier. For entities in the non-bank sector that do not engage in new lending, the average was 4.57%, down almost a full percentage point from 5.5% a year earlier. These reductions are welcome, and it is expected all mortgage creditors will continue to keep their lending rates under review. It is my clear view that where mortgage rates have in the past increased in line with ECB increases, they should now, in this new interest rate environment, also appropriately adjust downwards. The Central Bank will continue to monitor the level and distribution of interest rates in the mortgage market.

Pearse Doherty (Donegal, Sinn Fein)
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This is an issue I have raised with the Minister numerous times. Along with the former Minister, Michael McGrath, he was a cheerleader for the selling off of these loans to the vulture funds. He obstructed and blocked a Bill that would have prevented it from happening. All of these individuals are now paying more interest than they would be if they were with a main-street lender, even for performing loans. I would like the Minister to give us a further breakdown. How many of those mortgage prisoners are paying 6% or 7% interest rates? Take Pepper as an example. Pepper's interest rates went down twice during the ECB's eight cuts. Mars, as I understand it, only announced one. Some customers of Mars have actually seen their interest rates go up. It has been reported that interest rates have gone from being 7.7% in some cases to 7%, or from 7% to 6.3%. Some of these individuals are being charged extortionate rates. Given that the Minister was responsible for allowing this to happen, does he feel any responsibility for these individuals who are now being fleeced?

Paschal Donohoe (Dublin Central, Fine Gael)
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First, the Deputy referred to me being "a cheerleader". What I said at the time was that the sale of those loan books from those various banks was an important step in the banks regaining financial health, which, in turn, would help them to lend more in the future and contribute to our economy growing. I understood at that point the sensitivity with regard to it. That is why the consumer protection code applies to those whose loans have been sold. The Deputy said that I obstructed legislation. I voted against his legislation, just as he regularly votes against Government legislation, because I did not believe that it would be productive or play a role in dealing with these issues. At the time, I outlined other issues I had with this legislation. The Deputy asked me about how people are affected in different ways.

I note that the Cathaoirleach Gníomhach is ringing the bell before we get to the end of our allocated time.

Mattie McGrath (Tipperary South, Independent)
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Yes, because you go over it all the time.

Paschal Donohoe (Dublin Central, Fine Gael)
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Is that to encourage us to speak quicker?

Mattie McGrath (Tipperary South, Independent)
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I am giving you an opportunity to wind up.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Cathaoirleach Gníomhach is giving me a forewarning. In the next opportunity, I will do my best to go back to the particular question put to me by Deputy Doherty.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister made the point that he voted against or obstructed the passage of my Bill because he thought it was not in the Government's interest. He is 100% right. He took the side of the banks and the vulture funds. It was not in their interest for that Bill to go through. I will tell the Minister whose interest the Bill was in. It was in the interest of the woman who spoke to me who is charged 6.5% by Mars Capital, or more than 6% by Pepper regarding her mortgage. It was in her interest, in the interest of people in Donegal and in the interest of people in the Minister's own constituency. He took the side of the vultures and the banks. I am raising the thousands of mortgage prisoners whom the Government abandoned and decided they were on their own. The Government pretended that everything would be the same, but it is not. They were not protected under the consumer protection code for a long time. It was only a number of months ago that this loophole was addressed. The problem here is that if they were with the main-street bank they would be saving thousands of euro in interest. That is the problem

Paschal Donohoe (Dublin Central, Fine Gael)
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Again, the Deputy uses the language of obstructionism. I exercised my right in the Dáil. The Deputy has the same right. That is not obstructionism; that is me having to weigh up what I believe the right decision for our economy is overall and the fact that we need banks to be in a position to lend more in the future and invest more within our economy. That is not because I am making the case for a bank or picking the side of a bank-----

Pearse Doherty (Donegal, Sinn Fein)
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Yes, it is.

Paschal Donohoe (Dublin Central, Fine Gael)
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What I am doing is looking at what is right for our economy overall and for all of the households, all-----

Pearse Doherty (Donegal, Sinn Fein)
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Was it right for those people?

Paschal Donohoe (Dublin Central, Fine Gael)
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----- of the families-----

Mattie McGrath (Tipperary South, Independent)
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The Minister has the floor.

Paschal Donohoe (Dublin Central, Fine Gael)
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----- and all of the businesses within it,

Pearse Doherty (Donegal, Sinn Fein)
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Was it right for those people?

Paschal Donohoe (Dublin Central, Fine Gael)
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I had to consider that in the round.

Mattie McGrath (Tipperary South, Independent)
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The Minister has the floor.

Pearse Doherty (Donegal, Sinn Fein)
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Was it right for the person who is being charged 7%?

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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It is grossly unfair.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy asked me about those affected. I can give him the information that is available to me this evening, which is that the interest rate for 92% of mortgages held by lending non-banks is 5% or lower. The interest rate for 68% of mortgages held by non-lending non-banks is 5% or lower. While only 68% of mortgages are at 5% or lower, this is an improvement from where we were at the end of 2023. The consumer protection code applies to those affected.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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What is being done to the people paying those exorbitant interest rates is grossly unfair.