For the first time, the Central Bank of Ireland has published the true average rate of standard variable mortgages in Ireland. Commenting on the release, Fine Gael MEP for Dublin, Brian Hayes said, “the 4.26% average variable rate shows that homebuyers are paying excessive amounts for mortgages.
“We can now say with certainty that Irish homebuyers are being ripped off by banks, particularly when you consider the Eurozone average variable mortgage rate which is 2.47%.
“It is welcome that the Central Bank has finally published the true average variable rate in Ireland which is currently 4.26%. Up until recently, the variable figures that the Central Bank provided were distorted by the inclusion of ultra-low interest rate tracker mortgages which have been restructured.
“I believe there should be involvement in this issue from the Competition and Consumer Protection Commission. This Statutory body, set up in October 2014, is responsible for enforcing consumer protection and competition law. There should be a thorough investigation into the arguments that current standard variable rates do not reflect market conditions. It must be considered that ECB interest rates are at an all-time low of 0.05%. This low interest rate environment has been reflected in many Eurozone countries through lower variable rates but in Ireland banks are still comfortable offering variable rates of over 4%.
“We have recently seen the introduction of stricter mortgage deposit rules in Ireland. Added to this, homebuyers have to contend with excessive variable rates. A radical change in our mortgage system is needed; people should have valid alternatives if they cannot afford to buy a home. We should not be pushing potential homebuyers into a rental market which does not offer any long-term certainty.”