Saturday 1 October 2016

Finally, hard-pressed borrowers get a break

Published 10/05/2016 | 02:30

In Ireland, you are likely to find yourself paying some €2,500 more a year than your fellow eurozone members should you have a variable rate mortgage. Picture posed
In Ireland, you are likely to find yourself paying some €2,500 more a year than your fellow eurozone members should you have a variable rate mortgage. Picture posed

John Steinbeck, in his Great Depression epic the 'Grapes of Wrath', wrote: "The bank - the monster has to have profits all the time. It can't wait. It'll die. No, taxes go on. When the monster stops growing, it dies. It can't stay one size." Many Irish mortgage holders over the last number of years would probably share the 1962 Nobel Prizewinner's view, given the crushing burdens of their home loans. In Ireland, you are likely to find yourself paying some €2,500 more a year than your fellow eurozone members should you have a variable rate mortgage.

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Michael Noonan has repeatedly threatened to take action but his words seem to merely bounce off the banks, reverberating in a brazen echo. But finally it would appear borrowers are about to get a well-deserved break. The trajectory of variable rates seems to be about to change. A combination of irresistible forces from competitors, as well as looming legislative changes, have turned the tables on the financial institutions, leaving them with little choice but to act. The AIB has turned the screw on its rivals with a fourth 0.25pc reduction in its variable rate in the past 18 months. The cuts come against the backdrop of a Fianna Fáil bill aimed at turning the Central Bank into an enforcer on rate cuts. There was also good news for hard-pressed homeowners on another front: on the issue of mortgage arrears, the Government has performed a U-turn to ease the burden. Under a deal hatched between Fine Gael, Fianna Fáil and Independents, those in mortgage default will be able to challenge their bank. They will now be able to turn to an independent body should the bank reject genuine efforts to restructure their repayments.

They say to be able to do the right thing when no one is looking as opposed to doing it out of fear of consequences are two different things. Such fine moral arguments are best left to the philosophers - hard-pressed homeowners won't be looking this gift horse in the mouth.

Privilege of public office carries responsibilities

They say that power changes everything, but will it change the minds of super junior minister Finian McGrath or Waterford deputy John Halligan, both of whom have pledged not to pay their water bills?

Running with the hare and hunting with the hounds is not, alas, one of the many privileges that goes with being a member of government.

There are so many more pressing issues on the political agenda that neither man should allow the distraction of a controversy over the payment of the charge to become an issue. As the new Government Chief Whip, Regina Doherty, pointed out yesterday, they - the bills - won't "magically disappear".

Mr Halligan's defiance on the issue is disingenuous. All deputies have a responsibility to show a good example.

Apart from the fact that there is a legal obligation to pay, the moral case for doing so is also overwhelming. Our TDs do not have a right to pick and choose which laws they wish to respect and which they will flout.

A Government must have authority and if TDs decide that a particular law does not apply to them, what message are they sending out to the voters?

It has been said that death, taxes and childbirth never come at convenient times; they are inescapable facts of life, nonetheless, and elected representatives really should know better than to question them.

Irish Independent

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