Richard Bruton (Dublin North Central, Fine Gael)
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Question 264: To ask the Minister for the Environment, Heritage and Local Government the rate of interest and of mortgage protection cost applied under local authority loans; the typical annual payments on a €100,000 loan at these rates; if he envisages any change in these rates during 2006; and the impact they would have on typical annual payments. [35995/05]

Noel Ahern (Dublin North West, Fianna Fail)
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The interest rate on variable local authority loans is determined by the Housing Finance Agency by reference to prevailing rates in the financial market. The current variable rate is 2.95%. In addition, a mortgage protection charge of 0.598% and 1.65%, respectively, is applied to loans taken out on or after 1 July 1986 and pre-1 July 1986. Typical annual repayments today on a loan of €100,000 over 30 years would be €5,667. A rate increase of 0.25% would result in an annual increase in repayments of €166.

Prior to the introduction of variable rates in December 1987, certain fixed interest rate loans provided by local authorities would have carried rates in excess of these levels reflecting the cost of the long-term funds involved. Borrowers with such fixed rate loans are free to redeem, without penalty, and refinance in the private sector.