Fine Gael under pressure on its mortgages pledge
FINE Gael yesterday failed to say where all of the money would come from for their €166-a-month boost for up to 250,000 struggling homeowners.
The party's plan to help people who bought houses at the height of the boom was the first major promise of the 2011 General Election campaign.
And the party's finance spokesman Michael Noonan dismissed comparisons between his €120m package to help those in mortgage difficulties with his promises to compensate Eircom shareholders and taxi drivers in the 2002 General Election.
"We want to do a couple of things to ease the burden on people who are overburdened," he said.
Fine Gael's plan is to increase mortgage-interest relief to 30pc -- up from 20-25pc -- for those who bought houses for the first time between 2004 and 2008.
According to calculations by Frank Conway of Irish Mortgage Corporation, the number of first-time buyers during this period could be up to 250,000.
Currently, 33,000 people have not been able to repay their mortgage for six months or more.
However, Fine Gael is now under pressure to show how it will pay for the election promise to the "negative-equity generation", with Fianna Fail leader Micheal Martin challenging the party to "harden up" what it intends to do if in power.
"We have to await the detail of the Fine Gael proposal -- we are very careful about engaging in election gimmickry or promises and so on," he said.
Mr Noonan said the full cost would be accounted for in Fine Gael's economic plan next week -- and part of it would come from abolishing mortgage interest relief for first-time buyers from June.
"People who are buying houses now are getting them at rock-bottom prices. They don't need assistance," he said.
The maximum amount that a first-time buyer can currently receive in monthly mortgage-interest relief is €417 per month.
Mr Noonan said the increase in mortgage-interest relief would be worth €166 a month to a person with a mortgage of €300,000.