Variable mortgage holders deserted by Noonan
Published 01/04/2015 | 02:30
Prospects of a reprieve for hundreds of thousands of families struggling with punitive variable-rate mortgages have been dashed by the Government.
The banks have failed to pass on the benefits of lower interest rates set by the European Central Bank to mortgage holders.
But Finance Minister Michael Noonan is refusing to intervene in the setting of interest rates, despite the huge costs being imposed on homeowners not fortunate enough to have a tracker mortgage.
More than 300,000 homeowners are on variable rates, which at almost 4.5pc are among the highest in the eurozone.
They are almost 1.8pc higher than the average rate charged in the eurozone – a difference which means an extra €3,300 per year.
And even within Ireland, those on variable mortgages are paying €6,000 a year more than people on trackers – which have followed the European Central Bank as rates dropped to record lows.
Fianna Fáil tabled a private members’ motion in the Dáil demanding the Government and Central Bank engage more robustly with lenders. But Junior Finance Minister Simon Harris, speaking for Finance Minister Michael Noonan, said the setting of variable rates was a commercial matter for the banks, and the Government was not able to intervene. He said the Central Bank has no statutory role in the setting of mortgage interest rates by banks.
Meanwhile, those saving to buy their first home have also suffered a blow. It has emerged homebuyers who want to avail of the Government’s scheme to avoid paying deposit interest retention tax (Dirt) on their savings will have to register for the property tax first.
Experts said this makes the scheme of little use in helping first-time buyers save for a deposit to buy a property.