Fianna Fáil Finance spokesperson Michael McGrath has described comments that PTSB “cannot afford” to cut its 4.5% standard variable mortgage rate as an affront to its 79,000 customers who are paying excessive charges.
Deputy McGrath commented, “The message today from the Chairman of PTSB was that the bank will continue to charge standard variable rate customers what it can get away with because of losses the bank is incurring elsewhere. This is gross unfairly on the bank’s standard variable rate customers who are paying way over the odds for their mortgages. There is simply no justification for PTSB charging its variable rate customers a rate of 4.5% at a time when it’s cost of funds is 1.74% (as advised to the Joint Oireachtas Finance Committee in November 2014).
“The issue of losses on tracker mortgages is a red herring. It is no more justifiable for variable rate customers to be asked to make good these losses than it would be for them to pick up the tab for losses on development loans. Variable rate customers should be able to benefit from the reduction in the cost of funds which the ECB and general market conditions have brought about for the bank. Instead, the bank is using its massive margin on variable rate mortgages as a buffer to absorb losses it is incurring elsewhere.
“Fianna Fáil believes that the problem that tracker mortgages represent for banks should be tackled as part of the overall review of bank debt. The government should put the case for a transfer of tracker mortgages to a special purpose vehicle with a long term funding arrangement backed by the ECB to our European partners. The government seemed quite keen on this idea initially but has gone strangely silent on the issue in recent times.”