Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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335. To ask the Minister for Finance if he will ensure that mortgage provides in the Irish market furnish their customers with proper information and clarity on how interest rate increases are accrued on their accounts (details supplied); and if he will make a statement on the matter. [13547/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The Central Bank has put in place a range of measures in order to protect consumers who are mortgage holders. The consumer protection framework in place 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.

The requirements put in place by the Central Bank complement the European legislative framework, including the Consumer Mortgage Credit Agreements Regulations (the ‘Mortgage Credit Regulations’).

It is also worth noting that in 2017 the Central Bank introduced specific requirements for lenders to explain to borrowers how their variable interest rates have been set, including in the event of an interest rate increase.

Further measures were introduced in 2019 to help consumers make savings on their mortgage repayments, provide additional protections to consumers who are eligible to switch, and facilitate mortgage switching through enhancing the transparency of the mortgage framework.

Provision 6.6 of the Consumer Protection Code requires that a regulated entity must notify affected personal consumers on paper or on another durable medium of any change in the interest rate on a loan.

This notification must include specific information, including details of the date from which the new rate applies, the old and new rate, the revised repayment amount, as well as an invitation for the personal consumer to contact the lender if he or she anticipates difficulties meeting the higher repayments.

Finally, Schedule 3 of the Mortgage Credit Regulations outlines the mathematical formula in order to calculate the annual percentage rate of charge (APRC). In addition, the European Standardised Information Sheet (ESIS) provided for in Schedule 2 of the Mortgage Credit Regulations must be provided to a customer at the pre-contractual stage of an in-scope mortgage application, which outlines among other items, what the APRC is comprised of.