Pearse Doherty (Donegal, Sinn Fein)
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56. To ask the Minister for Finance the steps he will take to ensure that mortgage prisoners of vulture funds are not hit will excessively high interest rates; if he will outline the plan to provide a pathway for these homeowners to return to the traditional banking sector; and if he will make a statement on the matter. [5088/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government recognises the difficulties that the increase in interest rates in recent years has caused for some mortgage borrowers.

The ECB is responsible for the formulation and implementation of official interest rates. Changes in official rates feed into the general level of interest rates throughout the economy, but in a market economy the determination of retail and business lending rates are commercial decisions for individual creditors.

The same consumer protection framework applies to all Central Bank regulated entities, be that a bank, a retail credit firm or a credit servicing firm. From a regulatory perspective the Central Bank has put in place a range of measures in order to protect consumers. This framework seeks to ensure that regulated entities 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.

Specifically in relation to variable rate mortgage holders, the Central Bank's Consumer Protection Code requires all regulated mortgage creditors to explain to borrowers how their non-tracker variable interest rates have been set and to clearly identify the factors which may result in changes to variable interest rates.

The Central Bank has continued to engage with regulated firms on the operation of specific aspects of the consumer protection framework. Arising from this engagement, the Central Bank has indicated that regulated firms:

- have enhanced the supports available to borrowers in or facing arrears;

- have sufficient operational capacity in place to manage applications by borrowers to switch their mortgage or mortgage provider, and that there is no discrimination against borrowers based on where they currently hold their mortgage; and

- that changes in mortgage interest rates are in line with mortgage terms and conditions, the published variable rate policy statements of the relevant firms and the regulatory framework for which the Central Bank is responsible.

In addition, following engagement by Government with the Banking Payments Federation Ireland (BPFI) and the mortgage industry, a number of measures were introduced in 2023 to support borrowers who wish and are in a position to switch their mortgage.

This included the provision of an aligned industry wide set of initial eligibility criteria to facilitate people switching their mortgage from a non-bank to a bank. In order to be eligible to switch under these guidelines, customers need to be making full capital and interest repayments on their mortgage and to meet other eligibility criteria.

The BPFI has also launched a website, entitled 'it's in your interest', to further encourage and assist mortgage switching. However, the decision on whether or not to provide credit in any particular case, or the amount of credit to provide, remains a business matter for an individual lender.

Also, in light of the impact high interest rates continue to have on some mortgaged households, Budget 2025 extended the mortgage interest tax credit for a further year. This extension means that the relief will also be made available to assist mortgage holders in respect of the increase in interest paid in 2024 over 2022.

From a general perspective, now that the ECB is reducing official interest rates the Government expects all mortgage creditors to keep their lending rates under review and where mortgage rates had in the past increased in line with ECB increases they should now, in this new interest rate environment, also appropriately adjust downwards.

Finally, any person who is experiencing a repayment difficulty on their mortgage should contact their mortgage creditor to discuss the matter or also avail of the 'Abhaile' advice and assistance service available through MABS.