Minister Noonan’s announcement on Friday shows that clear progress has been made on the issue
Brian Hayes MEP for Dublin today said that variable mortgage rates need to be monitored into the future to ensure that rates do not become as excessive as they are today.
“Minister Noonan’s announcement that there has been an agreement by the six main lenders to cut variable rates is very welcome and shows that a lot of progress has been made on this issue.
“This is an issue that affects thousands of people every day and the expected cuts in July will give people much-needed relief. But this is likely to be an issue that will come up again and again. We need to remember that ECB interest rates will eventually start to be increased. We need to have a system that monitors variable mortgage rates to ensure that they reflect the current market conditions.
“The Competition and Consumer Protection Commission, who previously ruled out conducting an inquiry into variable mortgage rates, would be well-placed to introduce an ongoing monitoring system.
“The European Commission should also be in a position to examine why variable mortgage rates are so high in Ireland. 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 the Commissioner did say that our Competition Authority is well placed to look into this issue.
“We need to understand 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.