Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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70. To ask the Minister for Finance the steps he is taking in response to a mortgage services provider (details supplied) increasing the standard variable interest rates; and if he will make a statement on the matter. [11345/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The Government fully appreciates the difficulties that the current inflation and interest rate environment is causing for many households, including households servicing a mortgage.

However, as the Deputy will appreciate, the European Central Bank (ECB) is independent in the formulation and implementation of monetary policy and it is taking action to bring inflation down to its desired target of two per cent over the medium term.

In pursuance of this mandate, the ECB has now increased its official interest rates five times since last summer. The increase in official interest rates will feed into the general level of interest rates throughout the economy but decisions taken by mortgage entities in relation to passing on interest rate increases are a matter for those firms which are run on an independent commercial basis.

Neither the Central Bank nor I as Minister for Finance have any function or role in such decision making matters by credit institutions.

Nevertheless, as part of its consumer protection framework, the Central Bank has put in place a range of measures in order to protect consumers who take out or have a mortgage. The consumer protection framework seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle.

The consumer protection framework seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties.

In particular, the Central Bank's Code of Conduct on Mortgage Arrears provides important protections to a borrower in or facing arrears on a mortgage secured on a primary residence. It requires that all regulated entities have fair and transparent processes to deal with borrowers facing repayment difficulty and that due regard is had to the fact that each mortgage case is unique and needs to be considered on its own merits.

All cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her obligations. The Central Bank has indicated that it is seeing firms implement a wide range of solutions for borrowers and I would encourage any person experiencing mortgage difficulty to contact and engage with their financial service providers as early as possible. Also in November 2022, the Central Bank wrote to regulated firms to emphasise the onus on them to actively identify and address risks to consumers that may potentially emerge from changes in the economic landscape within which the firm and/or its consumers are operating and it has also indicated that lenders should ensure that ensure that they have the operational capacity in place to facilitate people to switch mortgage at a system wide level.

More generally, as the Deputy will appreciate, in the Budget and more recently the Government has put in place a range of measures to help households with the increased cost of living and these will be of benefit to households with a mortgage.