Fianna Fáil Finance spokesperson Michael McGrath has welcomed the publication of the Central Bank report on the influences on standard variable mortgage pricing in Ireland and has called for a stepping up of the campaign for mortgage fairness in Ireland.
Deputy McGrath commented: “The report from the Central Bank sheds important light on the nature of the standard variable rate mortgage market in Ireland. It clearly outlines the dysfunctionality in the Irish mortgage market. While the data it presents is stark I have to disagree with its conclusion that “policy steps to interfere with the rates charged risk creating side-effects.” It is my belief that we are already living with the negative impact both socially and economically of excessive variable mortgage rates which are in fact twice the European average. We cannot rely on moral pressure alone to solve this issue.
“We need to monitor closely how the banks follow up on their meetings with Minister Noonan. It is important to remember that this engagement only took place because of intense political pressure starting with a Fianna Fáil Private Members motion on the subject in March. The Minister for Finance and the banks are very reluctant participants in this process and we now need to see the colour of their money in terms of the actual rate cut that will be implemented. A reduction of 0.25% and the vague promise of a further cut of 0.25% will simply not be acceptable. That is why I believe there is a need for an intensified campaign in the Dáil and from advocacy groups to keep this issue firmly in the spotlight.
“I agree with the Central Bank’s statement that “Greater transparency surrounding the variable interest rate policies operated by each bank would help in this regard.” As it stands customers have been left bewildered as to why they are paying higher rates for their mortgages as ECB rates have fallen to record lows. It is doubtful however if the banks will actually voluntarily engage in such a process.
“Fianna Fáil believes a legislative framework is required to create a monitoring process for the level of competition in the mortgage market and the fairness of rates charged. This would act as a strong deterrent to banks from charging excessive rates and would only necessitate Central Bank action where the evidence points to a clear market failure. We will be bringing detailed proposals in this regard in the next number of days,” concluded Deputy McGrath.