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Saturday 2 December 2023 Dublin: 5°C
Shutterstock/Denys Prykhodov

Families one step closer to paying less on their mortgages

A bill passed tonight could result in 300,000 families seeing their mortgage repayments fall.

HOMEOWNERS WHO FEEL they are paying above the odds on their standard variable mortgage rates have cause to celebrate this evening.

They could see their mortgage rates slashed after the Dáil tonight passed a Fianna Fáil bill that could give the Central Bank new powers to cap the rate.

The average variable mortgage rate in Ireland is 3.6%, compared to across Europe, where it is only 2%.

The bill, supported by both Sinn Féin and Labour, could result in 300,000 families seeing their mortgage repayments fall.

The pill will be a bitter one for the government to swallow, with the Minister for Finance Michael Noonan calling the bill “seriously flawed”.

However, he said this evening that the government would not be pressing its proposed amendment, which allowed the bill to pass. It will now go to committee stage, with a number of TDs remarking tonight that changes will have to be made.

Yesterday, Noonan claimed that the introduction of the bill had caused a 10% fall in bank shares.

Fianna Fáil’s Michael McGrath accused Noonan of “scaremongering”, saying they were not linked.

McGrath said yesterday that some banks are “stubbornly committed to oppressive rates” which are impacting on the lives of hundreds of mortgage holders and families, many of whom he said bought in the boom and are in negative equity.

He said some of the rates being charged are “indefensible”.

Why should consumers pay 1% and 1.5% more than others in Europe?
McGrath said he hoped the threat of legislation would apply “downward pressure” on the banks to lower their rates.
Before this legislation comes into effect, the message is that banks might do well to act before that, by lowering their rates before any Central Bank intervenes.

Read: This bill might reduce your mortgage rate and be the government’s first defeat>

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