Government to press for new mortgage options
THE Government is going to put further pressure on the banks to help homeowners who want to move house but are afraid of losing their low-interest tracker mortgages.
Trackers are so cheap at the moment that the 375,000 homeowners who have them are reluctant to move house because they will lose the valuable mortgage rate.
The Government wants the banks to come up with new mortgage packages that will allow homeowners to keep at least some of the benefits of their tracker mortgage.
Its medium-term economic strategy states that there is a need for new mortgage products that will allow homeowners to trade up and trade down. This includes providing options for people on tracker mortgages "to increase mobility and the availability of properties for sale".
Bank of Ireland is already letting movers keep their trackers for five years if they move house -- although they will have to pay an additional 1pc interest on top of their existing rate.
A government source said that all new mortgage products to help those with trackers would have to be approved by the Central Bank, but that the Government would be working with the banks.
Finance Minister Michael Noonan insisted that the Government would also be pressing very hard to ensure the banks offered sustainable solutions to people in mortgage arrears.
The number of mortgages in arrears for more than 90 days has fallen slightly, from 81,156 to 80,854.
However, Fianna Fail leader Micheal Martin (right) told the Dail that credit ratings agency Fitch estimated that 20,000 houses would be repossessed after the recent law change by the Government. "Repossessions are becoming the norm and are the acceptable option for banks to pursue those in arrears. It seems this is with Government acquiescence," he said.