The Rural Independent Group in the Dáil have slammed what they described as the Government’s “complete ineptitude at addressing the grotesque interest rates being charged by banks on Irish homeowners with mortgages”.
They point to Central Bank figures which show Irish mortgage holders were charged interest over the past twelve months at 2.83%, compared to a European average of 1.35%, meaning Irish homebuyers with new mortgage agreements are still paying double the average rate of the eurozone.
They claim that Irish people are paying €80,000 more in repayments on a €300,000 mortgage over their EU counterparts.
“Disgracefully, Ireland now has the highest mortgage interest rates in the EU, highlighted in the Central Bank’s figures indicating that Irish mortgage borrowers are paying €80,000 more in repayments on a €300,000 mortgage over their EU counterparts,” they wrote.
The Leader of the Rural Independent Group, Deputy Mattie McGrath said that Irish Central Bank figures showed the average rate charged on new mortgages in Ireland over the past twelve months was 2.83 per cent, compared to a European average of 1.35 per cent, meaning Irish homebuyers with new mortgage agreements are still paying double the average rate of the eurozone, despite interbank lending rates and the ECB rates being at an all-time low.
“As a Group, we are deeply alarmed at the ongoing shameful behaviour of banks here in Ireland. Many of them were bailed out by the Irish taxpayer during the last financial crisis; yet, they are charging Irish consumers at least €80,000 more than their counterparts in other European countries, on a €300,000 mortgage over thirty years due to the average differential of 1.48 per cent,” he said.
“This means someone borrowing this amount over a 30-year period is paying an extra €222 per month – or more than €2,666 a year – compared to our European neighbours,” stated Mc Grath.
The Tipperary TD said that farmers and small businesses were also being “fleeced”.
“The deplorable actions of the Irish banking sector does not, however, cease with its mortgage customer, as banks here are also fleecing farmers and small and medium-sized enterprises (SMEs) with higher rates of more than three per cent than their EU counterparts on borrowings up to €250,000.”
“We are now calling on the Government, especially the Ministers for Finance and Public Expenditure and Reform, to immediately respond by introducing measures to bring about more competition into the Irish mortgage and retail banking sectors. Additionally, we believe in the option available of having all existing mortgages refinanced through an administrative process, to reflect the new 0 per cent and – 0.5 per cent money availability to banks. The current system cannot be allowed to continue, as it will cost people their homes, businesses, health and futures,” Deputy McGrath said.
“The intimate relationship between the Government and bankers must end now. A new paradigm shift and policy response on this matter must occur without delay. Enough is enough! Irish citizens can no longer be swindled by the banks, whilst the Government sit on their hands, continue to smile and defend bankers’ actions.”
“We are genuinely pleading with the Government to act now and use the Budget next week to establish a long-awaited new direction that stands on the side of ordinary homeowners, transforms the availability of finance and brings transparency to Ireland’s retail banking model,” concluded Deputy Mc Grath.