Sunday 23 October 2016

Tide has finally turned for mortgage holders

Published 18/05/2016 | 02:30

'Tide has finally turned for mortgage holders'. Stock photo: PA
'Tide has finally turned for mortgage holders'. Stock photo: PA

The Greek playwright Aristophanes wrote: "To win the people, always cook them some savoury that pleases them." New politics or not, no party in Ireland has ever mastered the art of cooking up tasty political recipes better than Fianna Fáil. Yesterday it stepped forward with a bill that was rejected in the last Dáil. But times change.

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It is intended to give the Central Bank new powers to target high variable interest rates on home mortgages. This is a mouth-watering prospect for the 300,000 who have waited far too long for something to be thrown their way.

The charge has been a crushing burden, despite years of historically low EU rates. Given that the banks were saved by taxpayers in the bailout, it seemed especially unfair that there was no real reciprocity. Finance Minister Michael Noonan threatened to act against the banks many times. While some banks did move, rates here remained way too high. Fine Gael would like to have voted the bill down, but the realpolitik of a Government with just 59 votes in a house with 158 TDs is beginning to assert itself.

Traditionally, variable interest rates are an area for the Competition Authority and not the Central Bank. But that too seems likely to change.

The minority administration cannot oppose the Fianna Fáil bill - a clear indication that the mechanics of Government have started to work differently.

The Central Bank may have something of an enforcer's role; if rates are not seen to be reasonable, it will have the power to put a cap on them. The powers-that-be in the European Central Bank in Frankfurt may not be best pleased that our Central Bank could be about to take to the field to champion the cause of our badly bruised mortgage holders. But all tides have to turn eventually, and those who have been shelling out far above the rates paid by their EU counterparts were due a break.

Irish Independent

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