Cian O'Callaghan (Dublin Bay North, Social Democrats)
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169. To ask the Minister for Finance if there is a customer/economic impact assessment for an interest rate scheme (details supplied); if this assessment is required for new schemes entering the market; and if he will make a statement on the matter. [23925/24]

Michael McGrath (Cork South Central, Fianna Fail)
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From a consumer protection and macro prudential perspective, there are a number of regulatory measures which apply to the provision of new residential mortgage credit to consumers. These include the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, the Central Bank Consumer Protection Code and the Central Bank macroprudential mortgage lending rules.

These measures place a number of obligations on lenders in relation to the provision of residential mortgage credit, including the requirement to:-

• where relevant, obtain relevant information from the borrower on his/her needs and objectives, personal circumstances and financial situation;
• assess the affordability of credit and the suitability of a product or service based on the individual circumstances of the borrower;
• provide credit only where the creditworthiness assessment indicates that the borrower is likely to meet his/her obligations in the manner required under the credit agreement; and
• provide an amount of credit in line with the loan to value and loan to income requirements of the macro prudential mortgage lending requirements.

• disclosure requirements as set out in the Sustainable Finance Disclosure Regulation (SFDR) which seeks to ensure that those purchasing financial products have the information necessary to understand their sustainability characteristics;
• requirements around integrating the consumer’s sustainability preferences when assessing the suitability of a financial product for the consumer; and
• requirements around integrating sustainability factors into the product oversight and governance process.

Within the parameters of this regulatory framework, the decision to provide a particular loan product and to grant an individual application for mortgage credit is then a commercial decision to be made by the individual regulated entity. I have no function in such decisions.

Nevertheless, the Deputy may wish to note that the energy intensity of borrowers is a growing risk channel for the banking sector. ‘Green mortgages’ provide lower interest rates on energy efficient properties, thereby creating an incentive for borrowers to invest in energy-saving technologies. Over time, the gradual decarbonisation of the mortgage book will lower energy-related credit risk in the banking sector.

In this regard, Central Bank research in 2023 noted the strong growth in ‘green mortgage’ originations since their introduction as a product in the Irish market in 2019.

The Deputy may also wish to note that Home Energy Upgrade Loan Scheme, which offers unsecured low-cost finance for eligible applicants to fund retrofitting of their properties for energy efficiency and decarbonisation purposes, has also recently been launched.