Pat Carey (Dublin North West, Fianna Fail)
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Question 526: To ask the Minister for the Environment, Heritage and Local Government if his Department has made progress with local authorities and financial institutions to enable affordable home owners who are mortgaged to a local authority through annuity loans (details supplied) re-mortgage their properties to take advantage of lower interest rates currently offered by the financial institutions; and if he will make a statement on the matter. [42682/06]

Noel Ahern (Dublin North West, Fianna Fail)
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My Department has facilitated standardised arrangements with a number of the main financial institutions who have introduced schemes of mortgage financing for persons wishing to access affordable housing. These arrangements relate only to the first time purchase of affordable properties.

The question of facilitating arrangements for persons in affordable housing also wishing to re-mortgage with private lenders has been the subject of discussions between my Department and a number of the financial institutions. The current practice requires that if a private lender agrees to provide re-mortgage finance it will be on the basis that their mortgage charge will rank below the clawback charge where such a charge exists. This is consistent with the Land Registry system on property charges which are time sensitive and means the older the charge the higher is its ranking.

It has not been possible to agree a standardised approach on the basis of the above. Notwithstanding this, my Department has no objection to a local authority allowing the re-financing of its mortgage, on an individual basis, through a private lender so long as the clawback provision is fully protected. It is a matter for the local authority in such cases to ensure that the clawback can be imposed as provided for in legislation.