Banks ‘gouging’ 300,000 variable mortgage holders, says Fianna Fáil

IRISH variable mortgages rates are nearly double those on the Continent, the Dáil was told yesterday. By Senan Molony Political Editor

Those who are not on tracker mortgages, which are no longer available from the main commercial banks, are being ‘gouged’ in comparison to their international counterparts, Fianna Fáil claimed.

The party accused the Government of ‘sitting on its hands’ on the issue, saying it was nearly three years since the banks had been called in to account for themselves to ministers.

‘It’s like an additional property tax every month – that’s the scale of this,’ said party finance spokesman Michael McGrath, who said the Government and Central Bank appeared indifferent to the misery being visited on nearly 300,000 families.

‘The average European variable rate is just 2.3 per cent but in Ireland you can add 2 per cent to that and get away with it,’ Mr McGrath said.

‘People on the variable rate are being gouged. There is now up to a 3 per cent gap with tracker mortgages linked to the ECB wholesale rate, which is now between 1 and 2 per cent.’

According to price-comparison website bonkers.ie, the rates currently being charged to first-time buyers with a €50,000 deposit borrowing €300,000 on a 20-year variable mortgage vary between 4.28 per cent at Permanent TSB and 4.6 per cent at Bank of Ireland.

For a mortgage of €100,000 every half a percentage represents an extra cost of €500 over the course of a year.

Mr McGrath said the Government had been ‘completely hands-off’ on the issue, not meeting the banks since June 2012, and had shown itself oblivious to the plight of variable mortgage holders.

Mr McGrath said recent developments whereby banks were cutting variable rates for new customers but not for existing clients had brought the issue into even sharper focus.

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