Michael McGrath (Cork South Central, Fianna Fail)
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There is a robust consumer protection framework in place in relation to mortgages and other credit agreements. This regulatory consumer protection framework provides the same protections for all consumers, regardless of the regulated entity with whom they are dealing such as a bank, a retail credit firm or a credit servicing firm.

This framework seeks to ensure that all Central Bank regulated entities, including entities which service mortgages or which acquired the legal rights of the creditor under a mortgage agreement, are transparent and fair in their dealings with borrowers and that all consumers are protected from the beginning to the end of their mortgage life cycle.

In relation to interest rates, I am acutely aware of the general increase in rates and the impact this is having on some households. However, the formulation and implementation of monetary policy is an independent matter for the European Central Bank.

In addition, any decisions taken by mortgage creditors in relation to passing on wholesale interest rate increases is, subject to compliance with the terms of the mortgage contract in relation to the setting and adjustment of the interest rate, a matter for those creditors which are run on an independent commercial basis. I have no statutory function or role in such decision making matters by credit institutions or other mortgage entities.

However, I have met with the Banking and Payments Federation Ireland (BPFI), CEOs and senior representatives of all the main mortgage lenders and servicers. I made it clear that they should be fully aware of the significant challenges that some of their customers are facing at this time and that they should respond by assisting their customers who are experiencing difficulty.

In relation to customers’ ability to switch to another provider to avail of a more advantageous mortgage interest rate, I also highlighted that greater clarity should be provided to customers on the possibility of switching provider. This option should be fully supported by all mortgage entities, including the existing mortgage creditor.

Further, I supported the steps taken by the Central Bank to ensure that firms proactively deal with emerging difficulties for their customers since the increase in interest rates. The Central Bank requires firms to enhance the range of supports available to borrowers in or facing arrears and to have sufficient operational capacity to manage applications by borrowers to switch their mortgage or mortgage provider.

Arising from that meeting, the BPFI implemented a number of further initiatives by the mortgage industry. This included:

• a second phase of a ‘Dealing With Debt’ campaign to highlight new and existing supports for concerned mortgage customers;

• mortgage servicing firms and MABS to collaborate on an expansion of streamlined customer engagement framework; and

• the provision of initial eligibility criteria by the main lenders to provide clear guidelines for home mortgage customers of credit servicing firms who are seeking to switch their mortgage.

This means that there is now an agreed industry wide set of initial eligibility criteria to facilitate people switching their mortgage from a non-bank to a bank. Credit servicing firms have committed themselves to working with these criteria to support customers switching and to ensure they are aware that they may have options to switch their mortgage.

Furthermore, in response to the impacts that increases in interest rates and the cost of living more generally are having on mortgage holders, Budget 2024 provided a mortgage interest tax relief. This is granted by way of a tax credit for home owners with an outstanding mortgage balance on their primary dwelling house of between €80,000 and €500,000 as of 31 December 2022.

The relief is now available in respect of the increased interest paid on the mortgage in the calendar year 2023 as compared with the amount paid in 2022 at the standard rate of 20% income tax.

Also, the Central Bank will continue to engage with regulated firms to ensure that actions meet the Bank’s expectations and all industry participants are extending themselves to support consumers in difficulty.