Michael McGrath, Fianna Fáil TD for Cork South Central, has asked the Government to clarify if it will now honour its commitment to force banks not to pass on a 0.25% interest rate increase to homeowners following today’s ECB decision to raise the interest rate.

Deputy McGrath said, “The decision by the ECB to increase the interest rate to 1.25% will come as a serious blow to many homeowners with variable rate and tracker mortgages. The rise today will mean an increase of €45 on a mortgage of €300,000.

‘The Programme for Government promised that banks in receipt of state support would be directed to ‘cut their costs, over and above existing plans, in a fair manner by a sufficient amount to forego a 25 basis point increase on their variable rate mortgage’.

‘Now that thousands of homeowners, already under increasing pressure to meet their repayments, are faced with an interest rate hike, it is time for the Government to come clean and tell people whether this promise will be kept.

“During the general election Fine Gael campaigned vigorously on the issue of helping homeowners in distress. They have already done a u-turn on their promise to abolish mortgage interest relief in June this year in order to finance greater relief for those who bought at the peak of the market. Are they now going to perform another u-turn and leave mortgage holders hanging following an increase in interest rates by the ECB?” concluded Deputy McGrath.