Bernard Durkan (Kildare North, Fine Gael)
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232. To ask the Minister for Finance the extent to which he can encourage the existing Irish banks to assist mortgage holders who may have had to resort to fund operators in respect of mortgages; and if he will make a statement on the matter. [21782/23]

Bernard Durkan (Kildare North, Fine Gael)
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233. To ask the Minister for Finance if he will outline the prospects for mortgage relief to mortgage holders who are in debt to fund operators; if any study has been carried out as to the possibility of reducing mortgage repayments; and if he will make a statement on the matter. [21783/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 232 and 233 together.

The formulation and implementation of monetary policy is an independent matter for the European Central Bank (ECB). As the Deputy is aware, the ECB has increased official interest rates over recent months as it attempts to combat inflation.

The level of official interest rates will influence the overall level of interest rates throughout the economy. However, the setting of retail lending rates by individual lenders is a commercial matter for that lender and I have no function or role in such decision making matters by financial institutions.

Research has indicated that there is potential for existing mortgage holders to make mortgage savings by switching their mortgage. This is a particularly important consideration at a time of rising interest rates.

I have met with the CEOs of the retail banks and a number of non-bank lenders where I emphasised that they should take a consumer focused approach to encourage switching where possible. I have also asked the Banking and Payments Federation to develop a campaign to ensure consumers are aware of the supports available. The Competition and Consumer Protection Commission (CCPC) and Money Advice and Budgeting Service (MABS) also play an important role in informing consumers about the options available to them.

It is a priority for me to ensure that the regulatory framework supports borrowers in the mortgage switching process. In the context of the review of the Consumer Protection Code, I have indicated that the Central Bank should review the existing regulatory provisions and consider whether more dedicated mortgage switching resources, such as a standalone mortgage switching code, could better encourage and facilitate switching in the mortgage market.

In that context and the rise in the cost of living more generally, the Central Bank wrote to all regulated firms last November to set out its expectations on how regulated firms should support their customers.

The Central Bank is scrutinizing the switching and lending activity of the retail banks to ensure there is no discrimination based on who a borrower's current creditor is and it has confirmed that the work identified no evidence to date of such discrimination.

With respect to mortgages, the Central Bank indicated that it is especially focused at this time on ensuring that firms:

• have the resources and arrangements in place to assess applications from existing and new or switching borrowers in a manner that is timely and based on prudent lending standards applied consistently across all applicants;

• have fit-for-purpose arrangements in place to anticipate and deal with customers in or facing arrears; and

• proactively assess the risks and consumer impact that commercial decisions, including rising interest rates, may pose to borrowers and have an action plan in place to mitigate such risks.

Last month the Central Bank published a note on the ongoing work to ensure regulated firms meet the expectations on protecting consumers in a changing economic landscape, relating to mortgages secured on a borrower’s primary residence.

The Central Bank has indicated that firms have responded with additional supports for borrowers and increased operational capacity. This has included proactive contact with vulnerable borrowers including those at greatest risk of default, and continued provision of supports, including alternative repayment arrangements, to borrowers at risk of arrears. The Central Bank will continue to engage with firms on areas where consumers can be better supported at this difficult time.

In relation to mortgage relief, I do not believe that the reintroduction of mortgage interest relief at this time is the appropriate course of action and in the best interests of all mortgage holders and the State in general given the potential Exchequer implications and the current high inflationary environment.