Fianna Fáil Finance spokesperson Michael McGrath has said the mortgage interest rate reductions by Permanent TSB and Bank of Ireland for new borrowers are deeply unfair as they will do absolutely nothing to address the continuing unfair treatment of their existing variable rate customers.
Deputy McGrath stated, “Today’s announcement is, at first glance, an overdue injection of some competition in to the stagnant Irish mortgage market. However, the vast majority of customers will not benefit. There are two important issues which the banks must now address. Firstly, they should make it clear that these new lower rates will be available, not just to first time buyers, but also to potential new customers wishing to switch their mortgage from another bank. At the recent Oireachtas Finance Committee hearings with senior bank executives, we were told that the actual level of switcher mortgages was minimal with both Bank of Ireland and PermanentTSB saying they represented only a tiny fraction of overall mortgage activity. Failure to make switcher mortgages available on a widespread basis will only further fuel the view that the banks are more interested in optics than in providing a genuinely competitive mortgage market.
“Secondly, the fact that reductions will only be enjoyed by new customers further highlights the unfair way in which existing customers are treated by the main banks. When AIB reduced its variable rate by 0.25%, it did so for new and existing borrowers. The decision by Bank of Ireland and PTSB to restrict the lower rates to new customers means that the benefit that will be felt is actually minimal. In essence, this can be seen as little more than a panicked reaction by these providers to the negative publicity associated with the continuing excessive rates they charge to their existing customers. Bank of Ireland and PTSB should follow the lead of AIB and ensure fair treatment for all customers.”