Friday 30 September 2016

Top court dashes hopes of mortgage rate cut

Published 25/06/2015 | 02:30

Minister for Finance Michael Noonan
Minister for Finance Michael Noonan
Alan Kelly

Banks have escaped being forced to slash their variable mortgage rates after a court dismissed an action that would have cost them billions of euro.

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The decision of the three-judge Court of Appeal means efforts to get mortgage rates reduced have suffered a major setback.

The move also puts the spotlight back on Finance Minister Michael Noonan to take firm action.

But mortgage groups said the campaign to get banks to stop overcharging 300,000 variable rate mortgage holders would go on.

The Court of Appeal overturned a High Court ruling forcing the financial service ombudsman to look again at a complaint that Danske Bank was charging excessive interest on its variable rate mortgages.

The ombudsman had rejected a complaint from Kenneth and Donna Millar from Portmarnock, Co Dublin.

The couple were disputing the move by the bank to push up their variable mortgage rate to more than 4pc at a time when the European Central Bank rate was falling. Mortgage experts said most banks would have had to slash variable rates if the couple had won.

Campaigners are now calling on Mr Noonan to bring in legislation to allow rates to be capped.

Barrister David Langwallner, who represented the Millars, said the judges had effectively ruled that only the banks were allowed to subjectively interpret what exactly market interest rates were and what cost of funding means.

Meanwhile, Environment Minister Alan Kelly last night unveiled a series of concessions for developers who offer discounted rents to their tenants.

They include low-interest loans, grants, loan guarantees on private borrowings and the provision of land. Landlords must then set tenants' rent below the market value.

Irish Independent

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