Central Bank seeks change in rules on variable rate rises
Published 13/11/2015 | 02:30
The Central Bank has proposed rule changes for banks when they are increasing variable mortgage rates.
Under the proposals, mortgage lenders may have to give more than 30 days' notice if they plan to hike variable rates.
But Brendan Burgess of the Fair Mortgage Rates Campaign said the proposals were "complete nonsense".
"They only serve to underline the Central Bank's complete lack of understanding of the reality of the mortgage market in Ireland.
"The proposals will be of no help whatsoever to mortgage holders who are paying twice the rate being charged in other eurozone countries."
Regulators are proposing that lenders set out the reasons why they are increasing the variable rate in letters to homeowners.
And banks could be under orders to tell mortgage holders about better-value options they offer, such as lower fixed rates.
And they would be required to provide deals from switching options outlined by the Competition and Consumer Protection Commission.
The Central Bank has not indicated how many days' notice lenders would have to give for pushing up interest rates.
Instead, it has sought views on its proposals under a consultation process.
Director of Consumer Protection Bernard Sheridan said: "We believe there is scope for increasing the level of transparency of mortgage rates. The measures we are proposing are aimed at increasing transparency and facilitating consumer choices."
Variable rates in this county are among the highest in the eurozone, with Danske Bank, for example, charging 4.9pc.
It comes as new figures from the Department of Finance show a continued fall-off in the numbers in arrears on their mortgages.
A total of 73,000 residential mortgage accounts were in arrears at the six main banks in September.
This is down 24pc on the same month last year.
There was also a decrease in the numbers who are more than two years behind on their payments.
This figure stood at close to 28,000 in September, which was the fifth month in a row it declined, the Department of Finance said.
The overall number of mortgages in arrears represents 11pc of the total for the Irish banks.