Mortgage Rise 'Unacceptable'

The two main Opposition parties have cricised Ireland's banks over their introduction of an increase in their variable mortage rate.

This morning, Fine Gael Housing Spokesperson Terence Flanagan Banks accused Bank of Ireland and ICS Building Society of continuing to "heap pain" on the taxpayers who saved them. Bank of Ireland has announced its variable rate would increase by 0.45% while the ICS Building Society said it would by raising its rate by 0.6%.

The TD said it was unacceptable banks continued to "rip off" variable mortgage holders, while the European Central Bank (ECB) had left interest rates untouched.

"While the ECB rates remain unchanged, the banks have chosen to rip off variable mortgage holders to pay for their own reckless behaviour. Homeowners are at the pin of their collar trying to make mortgage repayments. Thirty thousand are in arrears. These variable rate increases will exacerbate the problem," Mr Flanagan said.

He added: "The Minister for Finance needs to take immediate control of the situation and stop banks from exploiting variable rate mortgage customers as a soft touch."

Meanwhile, the Labour Party's Ciarán Lynch joined with Fine Gael's hostility to the increases saying the new mortgage interest rates announced by the Bank of Ireland will fill many mortgage holders with trepidation.

TD Lynch said the increase of almost half of one per cent means rates will be heading for an increase of 1.5% in this year alone.

"At a time when the underlying ECB rate has remained static for 14 consecutive months, such increases are completely unjustifiable. What we are now seeing is a situation where banks, hell bent on improving their own revenue streams, are gouging ordinary families," he said.

Mr Lynch explained a couple paying a mortgage €300,000 would see their repayments jump from just over €1,200 a month in January, to about €1,400 in August, heading to €1,500 by the end of the year. He said the increase, which amounted to an increase of €300 per month, or €3,600 a year, and was effectively a "bail-out by responsible households, of the reckless banks".

"We already know that tens of thousands of homeowners are under immense pressure with their mortgages, with many of them falling into arrears, and an increase in interest rates, such as this will only make things worse," he said.

(DW/BMcC)