January 10, 2020
Central Bank should be given power to cap mortgage interest rates – Pearse Doherty TD

Sinn Féin Finance spokesperson Pearse Doherty TD has called on the Central Bank to be given the power to cap mortgage interest rates, after it released statistics showing that mortgage interests rates were more than twice the European average.

Teachta Doherty wrote to the Governor of Central Bank on Wednesday 20th November requesting an investigation into the practice of dual pricing in the mortgage market. The Central Bank refused his request. 

This comes after Deputy Doherty drew attention to the practice in the insurance market, with the Central Bank since agreeing to investigate the practice and its impact on loyal and vulnerable consumers.

Speaking today, the Donegal TD said:

“Statistics published by the Central Bank show that the weighted average interest rate in November stood at 3.01 per cent – more than half the Euro-zone average. 

“The data showed the average interest rate on variable rate mortgages standing at 3.22 per cent.

“What is clear is that Irish banks are charging mortgage-holders considerably more than their European counterparts, despite enjoying profitability.

“The Deputy Governor of the Central Bank recently admitted that Irish banks have recognised they can be profitable while charging new customers mortgage interest rates of between 2 and 3 percent, but persist in charging existing customers in the region of 4.5 percent.

“On Wednesday 20th November I requested an investigation into the practice of banks overcharging existing customers on their mortgage interest rates. The Central Bank refused the request.

“The Central Bank must become more proactive in protecting mortgage-holders, and the State should give them power to do so.

“In 2015 I introduced legislation that would have given the Central Bank temporary powers to cap mortgage interest rates. While this Bill was defeated in the Dáil in 2015 by the Fine Gael and Labour, we believe such a measure is necessary.

“Sinn Féin would give the Central Bank the power to follow its words with actions and cap mortgage interests rates applied by the big players in our mortgage market.”

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