Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
TARGETED MEASURES TO help mortgage holders struggling with very high interest rates is set to form part of this year’s budget, it is understood.
Finance Minister Michael McGrath called in the banks, vulture funds and the Central Bank yesterday to discuss what measures the banking industry are rolling out to ensure borrowers are supported at this time of rising interest rates.
With just over a month out to budget day, it is believed the minister was firing a warning shot that the government would step in with interventions due to the banking sector and regulators displaying a lack of urgency.
In a statement after the meeting, the minister said:
“It will now be necessary for the industry to demonstrate that they are delivering for borrowers in difficulty with supports and certainty, and developing long-term sustainable solutions for borrowers.
“I have asked the industry representatives to reflect on the discussion today and to set out their response as a matter of priority.”
In his statement, the minister highlighted the need for customers to be allowed to easily access a mechanism to switch mortgage providers.
As budget talks continue, it is believed that the finance minister has grown increasingly frustrated at the slow pace in which customers have been supported.
Senior government sources state that McGrath is currently working on budget ideas to help mortgage holders, particularly those trapped paying high interest rates to overseas funds.
It is understood the finance minister is working with Social Protection Minister Heather Humphreys on possible measures, which could include targeted measures that are limited to borrowers who tried to switch mortgage providers and have been refused.
Expanding the Mortgage Interest Supplement to provide short-term income support to those who are unable to meet their mortgage interest repayments is under consideration.
Other ideas being worked on included enabling mortgage holders to switch their loans from a vulture fund to state-backed initiatives such as the Local Authority or Rebuilding Ireland home loans scheme.
McGrath also wants banks to make it easier for borrowers whose loans were moved to a vulture fund to switch back to one of the pillar banks.
He welcomed a court decision in May which forced a mortgage servicer, called Pepper, to give a borrower couple a low fixed rate of 2.5% for 25 years.
The minister said at the time that loan owners and mortgage providers should be offering fixed-rate options to their borrowers. Pepper has not been offering fixed-rate product solutions.
The hikes in interest rates have been felt by mortgage holders on variable and tracker rates and by any homeowner who has reached the end of their fixed-rate term.
Some 60,000 mortgage holders whose mortgages are owned by vulture funds are unable to switch to high-street lenders and are stuck on rates as high as 10%.
Vulture funds hold the mortgage contracts of around 85,000 Irish households.
As financial expert Mark Coan recently wrote in The Journal, many assume that the mortgages in this situation have ‘gone bad’, in reality only around 20,000 of them are currently behind in their repayments.
In fact, many people with the vulture funds have never been in any financial trouble, ending up with the funds through sheer bad luck. A sizable group of these customers, over 30,000, are simply with these funds due to the loan sales.
Senior government sources state that McGrath is “genuinely concerned” about the issue and “wants to do something to help those who need it”.
They acknowledged there are wider concerns relating to the rental market if mortgage holders are paying interest rates close to 10% with non-bank entities.
Housing Minister Darragh O’Brien has confirmed tax breaks for landlords are on the table in a bid to keep supply in the rental market.
However, there are now concerns that landlords trapped in high interest mortgage repayments may be forced to sell up, resulting in a further uptick in notices to quit for tenants.
“There is definitely no gain for anyone in repossessions happening in these cases,” said the senior source, who added that it is only renters, mortgage holders, and the government that lose out in such scenarios.
Opposition parties had called for a blanket form of mortgage interest relief but there has been pushback from those within government who fear it could ramp up house prices further.
Sinn Féin spokesperson on Finance Pearse Doherty welcomed the meeting the minister held with the banking sector yesterday, stating that he has been calling for a strategy to be developed to support those facing soaring interest rates.
“Households have faced a massive income shock as a result of soaring interest rates – with 1 in 5 households set to see their annual mortgage costs rise by more than €5,700.
“Households that had their mortgages sold off to vulture funds have seen their interest rates soar to as high as 10%, effectively becoming mortgage prisoners.
“These sales were supported by Fianna Fáil and Fine Gael and were carried out by many of the banks and vulture funds that attended today’s meeting.
“They have a responsibility to right this wrong and to provide a path for these households to return to the mainstream mortgage market,” said Doherty.
He said there has been little evidence of households switching from vulture funds to mainstream banks, stating that today’s meeting must result in real action rather than simply being a box-ticking exercise.
“How many households have tried to switch from vulture funds to mainstream lenders in the past 12 months? How many have been successful and how many have not?
“These are the questions to the Central Bank and Government should be asking and acting upon. It is also incumbent on the Government to support households that are suffering from this income shock,” he said, stating that the government cannot stand idly by.
To embed this post, copy the code below on your site
Totally true, being an Olympian is what we all dreamed of when we were young.
For the next fortnight those who have been selected to represent Ireland are fulfilling that dream, some maybe for several times beforehand.
Congratulations and best wishes to them all, and here’s hoping that they all exceed their expectations.
@Garry Coll: most young lads dream of snorting cocaine off hookers
What a load of bollix( sorry only stirring) It was fab.Best of luck to all our athletes.
@Willie Marty: LOL… Love it!
@Regular John: Merci.. !!
Pure dedication and sacrifice. Bring it on home, Snoop.
Give the whole lot of them a yard of ash, and let them Hurl. All that public money going to Foreign soil and Foreign games should be stopped, immediately !!
@Sean O’Callaghan: meanwhile, the GAA rob the poor to pay the rich. Nice!!
@Paul Gorry: You’re some eejit taking the bait to the most obvious troll.
Panen et circenses!
The opening ceremony seemed horrible to me… In fact, I think France today is just a garbage dump and the Olympic Games have become a kind of Eurovision Song Contest…
@TheLost Traveller: Why did you watch it then ?
You obviously know nothing about France. If the comments section on the journal is anything to go by regarding Ireland ; I’m living in paradise over here !!!
Clown
@offside again: A good question….I watched the opening, I don’t follow the competitions anymore….As for France, I just came back from a business trip, for a week, in Marseille….It’s a disaster. Thanks to my job, I know France very well, from before the 90s. Napoleon is probably rolling in his grave watching what is happening now in his country,from all points of view. Have a nice day.
@TheLost Traveller: You are indeed a lost traveller ! Marseille/Paris/Nantes/Lyon/Lille etc are not France. I don’t think you know it as much as you believe you do.
No more than Dublin is Ireland.
As for Napoléon ; the French do admire him, but they have moved on from that time.
I don’t believe you
@TheLost Traveller: france is better than ireland in every meaningful metric. Healthcare, education, cost of living, public transport infrastructure.
I can’t wait for the track races, especially 100 metres sprint which is the pinnacle!
@Sean Money: yes and the 1500 metres which used to be referred to as the blue riband although the 100 probably just shades it as it gives us the fastest man/woman in the world..
@James Leahy: Fastest over 100m! Then there is the fastest over 200/400/800/1500m .. etc !!! But I know what you mean !
@offside again: good point although the names roll off the top of the tounge Florence joiner smith Carl Lewis Usain Bolt.
@James Leahy: bit cotraversial but it was the blue riband event until it started to be dominated by African countries .. post Coe/Ovett/Kramm/Coughlin the 100 took over more and more … Lewis/Christie eh hem Johnson etc
@Pad: interesting take on things. ‘burst of energy’ Indeed !!!
@offside again: I’m a cycling fan so I prefer the tactical positioning over a distance and sprint at the end !
Great show from Gojira Sinéad! Hon Ireland!
@G: Because the man with the task of delivering the Paris 2024 Olympic Games’ opening ceremony said he wants everyone to feel represented. He also wanted to ensure his celebrations showed that there ‘is room for everyone in Paris’. The opening ceremony would only be a success in his view ‘if everyone feels represented in it’. He was bullied growing up (a harsher type of bullying than you would do or are doing here), so it was important to him (and should be to all and to what the Games represent). Least of all, one only has to know something of beliefs, practices etc. in Ancient Greece to see how all of this might bear some relevance.
@Jack Hayes:
Excellent comment ! The French did well,
considering the circumstances. Now let the games commence !
@Jack Hayes: it’s almost refreshing to see how somebody can squeeze so much rubbish into a reply. Referencing ancient Greek practices. Making out I am a bully by asking a question(which is now deleted thanks to the journal).
Tell me, how does a male with one ball hanging out mere metres from a teenage girl represent inclusion? Or am I hand picking to suit my own query? Like you have clearly done.
@ Sean O’Callaghan: You keep being a bigoted GAA-Head. Your vile sectarian attitude and the same mindset shared by many of those invoiled in the GAA, from supporters to those who play and run the game is a disease in modern day Ireland.
You personify everything that is wrong with the GAA.
Thank you for highlighting this in public for all to see.
have your say