Barry Heneghan (Dublin Bay North, Independent)
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385. To ask the Minister for Housing, Planning, and Local Government when he intends to pass on the circular that needs to be sent to local authorities before councils can pass on the interest rate cuts, as it is now over 12 months since the first interest rate cut was announced by the ECB and none have been passed on to the mortgage holder; and if he will make a statement on the matter. [4670/25]

James Browne (Wexford, Fianna Fail)
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The Local Authority Home Loan is a Government backed mortgage scheme for creditworthy applicants who cannot get sufficient funding from commercial banks to purchase or build a home. It has been available nationwide from local authorities since 4 January 2022 for first-time buyers and fresh start applicants. The loan can be used both for new and second-hand properties, or to self-build.

Local authorities borrow from the Housing Finance Agency to finance their lending under the Local Authority Home Loan scheme. While administratively it is my Department that instructs local authorities to change interest rates, this instruction generally reflects changes in the cost of finance from the Housing Finance Agency, as by law the interest rate charged cannot be below the cost of finance from the Housing Finance Agency.

The interest rate for the Local Authority Home Loan is not directly linked to the European Central Bank refinancing rates. That said, as the cost of finance to the Housing Finance Agency is determined by the cost of finance on international markets, the monetary policy decisions of the European Central Bank do ultimately have an influence. However, it is not possible to give guidance as to when and by how much interest rates for the Local Authority Home Loan may change.

The current interest rate charged to new borrowers for loans drawn down is as follows:

• For mortgages up to 25 years the interest rate to be applied is 4%
• For mortgages over 25 and up to 30 years the interest rate to be applied is 4.05%