Official figures released by the Central Bank today reveal the extent to which 300,000 variable rate mortgage customers are being ripped-off compared to customers elsewhere in the euro zone, according to Fianna Fáil Finance Spokesperson Michael McGrath TD.
The Retail Interest Rates for February 2015, published today by the Central Bank, show the variable rate on new mortgage loans in Ireland is 4.2% compared to a euro area average of 2.09% on new mortgages.
Deputy McGrath stated, “The official data published by the Central Bank today backs up the argument Fianna Fáil has been making that 300,000 variable rate mortgage customers in Ireland are getting a very raw deal. There is no justification for the fact that the rate being charged in Ireland is double the rate elsewhere in the euro area. The exorbitant variable interest rates charged in Ireland mean that thousands of families are paying hundreds of euro extra each month in interest payments. This is a scandal and it must be brought to an end.
“The truth is that many standard variable rate customers in Ireland are paying 4.5% on their mortgage at a time when the cost of funds for the banks is as low as 1%. Furthermore, it is nothing short of a disgrace that many of the banks have denied their existing variable rate customers the benefit of modest rate reductions introduced for new customers in recent months.
“The onus now is on the government and the Central Bank to address this blatant discrimination against standard variable rate customers. These customers have been abandoned and left to the mercy of the banks who have taken full advantage of the fact that the opportunity to switch one’s mortgage from one lender to another is extremely limited in Ireland. This issue is now getting the publicity it deserves. We now need to have direct engagement between the Central Bank, government and the banks, to bring about interest rate reductions for these 300,000 customers.”