Brian Hayes MEP for Dublin today said that the European Commission is clearly in a position to investigate why standard variable mortgage rates are so high in Ireland compared to the rest of the Eurozone.
“The European Commission’s role in competition policy is to ensure that companies and businesses across the EU compete fairly and offer products which reflect market conditions. Clearly, variable mortgage products in Ireland do not currently reflect market conditions given that the ECB interest rate is 0.05%, while many banks are charging excessive rates well over 4% for variable mortgage products.
“Commissioner Jonathan Hill informed me of the Commission’s position on this issue and it is unlikely that the Commission will investigate variable mortgage rates since he believes that this issue does not affect trade between Member States. But I believe there is clear scope for the Commission’s involvement on this issue. There needs to be some investigation why variable rates are so high in this country and given that banks interest rates’ are set by a European institution, I believe that the European Commission can take action.
“There needs to be a clear examination as to why other banks are not entering the market in Ireland. Competition among Irish banks is poor and this is a factor which has allowed variable mortgage rates to soar. In Northern Ireland there about 28 institutions offering mortgage products while in the Republic there are only really 6 players. Interest rates for variable rate mortgage holders in the Republic are between 1% and 1.5% higher than similar mortgage customers with the same banks in Northern Ireland.
“I welcome the Central Bank of Ireland’s work on this issue but there needs to be an EU assessment of why Ireland is so far behind its Eurozone counterparts in offering reasonable variable mortgage products.”