Government urged to introduce interest relief on tracker mortgages
Photo: Sinn Wednesday The Leinster 07/09/22 Pearse House Speaks Storan Damien On Media Doherty Td At To Fein
The Government is facing calls to introduce mortgage interest relief for homeowners on tracker mortgages following the European Central Bank’s (ECB) decision to increase interest rates again.
Sinn Féin finance spokesman Pearse Doherty called on Tanáiste Leo Varadkar to examine introducing “targeted, tailored, and time-bound mortgage interest relief”, particularly for homeowners on tracker mortgages whose payments could increase by more than €2,000 a year.
The Donegal TD said it is unfair that Irish banks made a “bonanza” from interest rate hikes.
He told Mr Varadkar that Irish banks "should be able to absorb" and not pass on the cost to mortgage holders.
“Households with a tracker mortgage with an outstanding balance of €200,000 would see their annual payments increased by over €2,000 per year compared to the start of this year," said Mr Doherty.
"They've increased the market share since, they've continued dividend payments to shareholders this year, and as the Central Bank made it clear in May of this year, profitability in the banking sector has recovered and is set to be bolstered as a result of rising interest rates.”
He added: “According to the banks’ own estimates, these interest-rate hikes will bolster their interest income by over €1bn each year.”
Mr Varadkar said the ECB increasing its rates would be "very unwelcome", especially for tracker-mortgage holders who would receive a third letter this year informing them that their repayments are going to increase.
He said Irish banks should not use rising interest rates as an opportunity to make excessive profits, but he rejected the call for mortgage relief.
“I’d love to bring back mortgage interest relief for people who have tracker mortgages," he said.
Mr Varadkar called the finance spokesman “Kwasi Doherty”, referring to former UK chancellor Kwasi Kwarteng, whose mini budget resulted in his sacking and the downfall of Liz Truss’ government.
Mr Varadkar added that Sinn Féin now has “another set of populist promises to take advantage of people who have tracker mortgages. Like, when are you going to learn from what’s happened across the water?”
Speaking earlier to reporters, Mr Varadkar said the expected hike in mortgage rates could help “contain” or bring down house prices in Ireland.