Need for movement on mortgage interest rates


East Galway TD Paul Connaughton has highlighted the need for banks to lessen the current burden being placed on variable mortgage interest rate holders.
Speaking during a recent Private Members debate in the Dáil, Deputy Connaughton spoke of the financial and emotional stress being placed on families across East Galway by the huge differences in mortgage rates being paid and the lack of fairness for bank customers in terms of variable mortgage interest rates.
‘More than likely they know their neighbour has a tracker mortgage while they have a variable rate mortgage. It is very easy to calculate the difference between what they are expected to pay back on their mortgage and what their neighbour is expected to pay. It is very hard for people to stomach that, given that they are going through the same trials as their neighbour. It might be unemployment or a reduction in income since the recession began. However, as the country starts to pick up they appear to be two steps behind their neighbour all the time. This is not about bitterness or wishing worse for their neighbour, but about them wanting to be given the same opportunity everybody else is given.’
He acknowledged Finance Minister Michael Noonan’s statements about opening the market to allow more competition in the Irish banking market, but said that more stern action is required to help those currently experiencing these difficulties. Deputy Connaughton also acknowledged that steps have been taken to deal with people in mortgage arrears, and said that while many of the people caught in the variable mortgage rate trap are not yet in arrears, should they current situation persist, they could fall into arrears in coming months.
He called for immediate action stating, ‘The banks are beginning to return to profitability. However, that must not be on the backs of people who made a decision to go with a variable rate over a tracker mortgage. As the banks return to profitability, they should be rewarding the people who bailed them out. Let us be blunt and honest about this, it does not seem to the people on variable mortgage rates as if this is happening at the moment.
‘The Minister of State has announced what will happen in future and all of that is welcome. However, we really need to get across the idea that these people are in trouble now. Something that is due six months down the line or three months down the line or a meeting that will happen at some stage is cold comfort for someone who is paying a high variable rate at the moment and who simply cannot afford to keep doing so. We need to take whatever actions we can take now.’
Concluding his speech, the East Galway TD supported proposals to reduce the bankruptcy term to one year and reiterated his call on the banks to treat customers with variable mortgage interest rates fairly.