Tuesday 6 December 2016

Government has failed families on variable interest rate mortgages - Micheal Martin

John Downing Political Correspondent

Published 15/04/2015 | 17:56

Micheal Martin
Micheal Martin

Families burdened by mortgage interest over-charging by banks face pressure which "puts water charges and property tax in the halfpenny place," the Taoiseach was told today.

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Fianna Fail leader Micheal Martin told the Dail the Government had failed to offer any real remedy for 300,000 mortgage holders on variable rates of interest.

Mr Martin said a family with a €200,000 mortgage, on variable interest terms, pays €6,000 more per year than a family with a similar mortgage on "tracker" interest terms.

He said that even half of one per cent reduction in interest rates would put €200m back into the economy.

"It would be an enormous relief for families and would put issues like water charges and property tax in the halfpenny place," Mr Martin told the Dail.

Taoiseach, Enda Kenny, said the Government cannot fix mortgage interest rates - and did not want to have that power.

Mr Kenny said the Government "are not happy with the banks" who were charging far more to customers than they were paying to borrow the money.

The Taoiseach said that Finance Minister, Michael Noonan, had met the Central Bank governor, Patrick Honohan, on the issue and staff at the Central Bank were scrutinising data from the banks about their financial position.

The Fianna Fail leader said Mr Kenny was using these kind of arguments "when it suited him."

Mr Martin said the Finance Minister had claimed credit in November 2011 for obliging Allied Irish Banks to pass on a European Central Bank interest rate reduction to its customers.

Separately, Fine Gael TDs and senators have increased pressure on government to deliver a remedy for families suffering from high mortgage interest rates.

The weekly meeting of the Fine Gael parliamentary party at Leinster House was dominated by the issue of banks' failure to address the mortgage crisis.

At the meeting Cork North West TD, Aine Collins, proposed a plan that would see councils buying houses or flats which were the subject of mortgage distress at a discount of 20pc below market value. The councils could then rent these properties to the occupant who could not keep up mortgage payments.

Ms Collins argued that this 20pc price reduction would be the banks honouring their social commitment following their bailout by the taxpayer after the collapse of autumn 2008. In response, TDs and senators were told a menu of options is being prepared and will be unveiled in the next few weeks.

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