Fianna Fáil Finance Spokesperson Michael McGrath has said Minister Michael Noonan must deliver a strong and forceful message to the banks this week on the exorbitant standard variable mortgages rates they are charging 300,000 mortgage holders in Ireland.
Deputy McGrath said it is well past time the Minister called a halt to the rip-off of variable rate mortgage customers by the banks.
Deputy McGrath stated, “Following sustained pressure from Fianna Fáil and consumer advocates, I welcome the fact the Minister for Finance is finally meeting the banks to discuss variable mortgage rates. The Minister needs to deliver a strong and forceful message to the banks that the rates they are charging are without logic, are not acceptable to the Oireachtas and must be reduced significantly.
“I have yet to hear any justification as to why standard variable mortgage rates in Ireland are double the euro area average. It is absolutely inexplicable that a number of banks continue to charge up to 4.5% on variable rate loans despite their cost of funds falling towards 1% in recent times. The bottom line is a variable rate should move in line with market conditions. Banks are now able to access funds at record low rates from the wholesale markets, the ECB and their deposit base. They have failed to pass on that benefit to their variable rate customers.
“I do not believe that the introduction of a special levy on the banks is the best way to go. This could merely increase the cost of variable mortgages even further as the banks would seek to recoup the cost of the levy. If the banks are unwilling to reduce their rates, I strongly believe the Oireachtas needs to enact legislation to address the scourge of excessive variable rates and Fianna Fáil will play a leading role in ensuring that is done.”