Monday 5 December 2016

Central Bank's probe an 'excuse to avoid action on mortgage overcharging'

Published 10/09/2016 | 02:30

Investigation: Central Bank governor Philip Lane. Photo: Collins
Investigation: Central Bank governor Philip Lane. Photo: Collins

The Central Bank's plan to conduct a probe of the mortgage market has been dismissed as an excuse to avoid doing anything about overcharging by banks.

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Central Bank governor Philip Lane has outlined plans to conduct an investigation into mortgage interest rates, home-loan products and switching levels.

In a letter to MEP Brian Hayes, the governor said this work was part of its "ongoing surveillance of the household financing landscape".

The Central Bank is considering a tender for an external party to complete the research and analysis, with the project to be completed early next year.

About 350,000 mortgage holders are on variable rates, which are among the highest in the eurozone.

Fianna Fáil's Michael McGrath said: "The research is just another excuse for doing nothing to help mortgage holders who continue to pay interest rates that are way over the odds."

And the founder of Askaboutmoney.com Brendan Burgess said the plans to conduct a new investigation were an attempt to deflect attention from the soon-to-be-enacted legislation to force variable mortgage rates closer to the European average.

"This is an excuse to pretend they are doing something. They are just trying to head off the Fianna Fáil legislation on mortgages which is due to be enacted soon," Mr Burgess said.

The legislation, which seeks to give the Central Bank powers to regulate mortgage interest rates, is due to go to the committee stage in the Houses of the Oireachtas soon.

Mr Burgess added: "The idea of appointing external consultants and this taking until 2017 is appalling. I could have a report by the end of the month."

New figures shows homeowners here are still paying a large interest-rate premium compared with those in other eurozone countries.

A monthly report on interest rates from the Central Bank said the variable rate here was 3.6pc, down from 4.1pc a year ago. The interest rate that includes ultra low tracker rates is 3.11pc, which is far higher than the equivalent eurozone rate of 1.82pc.

Irish Independent

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