Central Bank finally discloses true mortgage rates – Hayes

Brian Hayes MEP today welcomed the disclosure of the true mortgage rates advertised by Irish banks, which emerged during the address by Governor of the Central Bank of Ireland, Patrick Honohan, to the Oireachtas Finance Committee.

“The Central Bank has finally revealed that the average rate for mortgages charged by Irish banks is 4.51%. This is the first time such figures have been available to the public. This disclosure by the Central Bank should be welcomed but it also exposes the rip-off that Irish customers have to deal with when paying for a mortgage,” said Mr. Hayes.

“This figure is almost 2% higher than the Eurozone average. When we have a banking sector that is dominated by banks which are servicing loss-making tracker mortgages, the incentive to charge standard variable mortgage rates in excess of 4.5% is very high.”

“The Central Bank of Ireland previously said that the new mortgage business rate was 3.47%, however, this included restructured tracker mortgages, despite the fact that no tracker mortgage has been sold since 2008. The ECB stood over this and claimed that this was in line with their rules,” added Mr. Hayes.

“I will be bringing this issue to the attention of the ECB. As the new supervisor of the Eurozone’s main banks, the ECB needs to ensure that national regulators publish new business figures that accurately represent the current mortgage rate offered by banks.”

“If I walk into a bank in Germany or France, I can get a 20-year fixed rate mortgage at less than 3.5% interest. Our mortgage system needs a major overhaul. We don’t have a market for reasonably priced long-term fixed interest mortgages; neither do we have a rental system that offers long-term security. Many other European countries offer that long-term rental security as an alternative for people who do not wish to buy a house.”

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