Cian O'Callaghan (Dublin Bay North, Social Democrats)
Link to this: Individually | In context

264. To ask the Minister for Finance the breakdown of the number of mortgage holders paying an interest rate over 6%; the number paying an interest rate over 7%; the number paying an interest rate over 8% divided into traditional bank lenders and non-bank lenders, in tabular form; and if he will make a statement on the matter. [31937/25]

Cian O'Callaghan (Dublin Bay North, Social Democrats)
Link to this: Individually | In context

265. To ask the Minister for Finance if he will request the major banks to bring down interest rates in line with European Central Bank rate cuts without delay; and if he will make a statement on the matter. [31938/25]

Cian O'Callaghan (Dublin Bay North, Social Democrats)
Link to this: Individually | In context

266. To ask the Minister for Finance if he will take steps to allow banks to accept transfers of performing mortgages that were previously considered non-performing loans; and if he will make a statement on the matter. [31939/25]

Cian O'Callaghan (Dublin Bay North, Social Democrats)
Link to this: Individually | In context

267. To ask the Minister for Finance if he will set a maximum interest rate for credit servicing funds that corresponds with the European Central Bank interest rate. [31940/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

I propose to take Questions Nos. 264, 265, 266 and 267 together.

The Central Bank publishes full Primary Dwelling Home (PDH) mortgage interest rate distributions in its “Frontier Statistics: Mortgage Interest Rate Distributions”. The latest information which is for Q4 2024 in relation to the percentage of accounts with interest rates above 6%, 7%, and 8% split by banks, lending non-banks, and non-lending non-banks is shown in the table below which has been provided by the Central Bank. Also set out is the equivalent data for Q4 2023.

According to the Mortgage Interest Rate Distributions Frontier Statistics Publication for Q4 2024, the percentage of accounts with interest rates above 6%, 7%, and 8% split by banks, lending non-banks, and non-lending non-banks is as follows for December 2023 and December 2024:

The formulation and implementation of monetary policy is an independent matter for the European Central Bank (ECB).

The ECB increased official interest rates over the course of 2022 and 2023 as it moved to combat excess inflation. However, since last summer it has reduced official interest rates on eight occasions, the most recent of which was announced last week and which comes into effect from 11 June 2025. These monetary policy changes, taken together with a change to its operational framework for implementing monetary policy last September, have resulted in a reduction of 2.35% in its main official lending rate to 2.15%.

While changes in the level of official interest rates will feed through to the wider economy, it does not have a uniform impact. In a market economy the determination of retail and business lending rates are commercial decisions for individual creditors and other factors, such as the cost of wholesale and retail funds, risk appetite, contractual terms, creditor status, operational costs, expected return, competition and desired market segment, will also be relevant. I have no role in the setting of interest rates by regulated commercial credit providers and I do not propose to set a maximum interest rate for credit servicing funds or for any other regulated entities operating in the mortgage market that corresponds with the European Central Bank interest rate.

As the Deputy will be aware, due to their particular contractual arrangements, most tracker mortgage borrowers will, as the ECB reductions work through the system, see their mortgage interest rate decline in line with the reduction in the main ECB lending rate. However, in the case of other variable rate mortgages the pass through of monetary policy rate changes, either upwards or downwards, is less rigid than is the case with tracker mortgages. In this regard the transmission of monetary policy rate changes happens with long and variable lags and the Central Bank has indicated that this was true as rates were rising and it also notes that this is also the case as ECB policy rates move lower. This will also be the case for fixed interest rate mortgages but, of course, the interest rate on such mortgages does not adjust until the end of the fixed rate period.

However, in general, recent Central Bank data indicates that the average interest rate on outstanding mortgages held by bank and ‘non-bank’ regulated entities has declined over the past year. This is welcome and, 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. The Central Bank will continue to liaise with regulated entities on this matter.

The Central Bank has put in place a range of measures to protect consumers who have or who are taking out a mortgage.

Specifically in relation to non-tracker variable rate mortgages, the existing Central Bank 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.

Also mortgage providers are required to issue an annual notification to variable rate mortgage holders and at fixed rate maturity for fixed rate holders, which among other items shows a summary of alternative mortgage products available from that provider. Furthermore, under the revised Consumer Protection Code, which will come into force in March 2026, mortgage lenders will be required to include within these notifications a personalised euro savings estimate alongside each alternative mortgage refinancing option presented.

Also, the mortgage industry has introduced several measures to support borrowers who wish and are in a position to switch their mortgage. This includes 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.

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