home » media centre » press releases

Labour urges help for fixed rate mortgage holders

Issued : Tuesday 14 April, 2009

The Labour Party Spokesperson on Social and Family Affairs, Roisin Shortall TD, has called on the government to use its new influence over the banks to make it easier for people to change from fixed-rate mortgage repayments to tracker mortgages

"For mortgage holders on a tracker mortgage, the cost of interest on their monthly payment has declined significantly in the last 12 months - by 26%. This has helped somewhat to offset pay cuts, extra taxes, and extra levies. It has helped them to meet higher costs on items like groceries, insurance, childcare and GP fees.
"But not everyone has been so lucky.
"Mortgage holders on a fixed-rate mortgage have had to bear all these extra costs, cuts and charges too; yet their monthly mortgage bill has not reduced at all. Indeed people with mortgages of over seven years standing will face increased costs as a result of the reduction in mortgage interest relief announced in the budget. Indeed the justification offered by the government for cutting the tax relief was the drop in interest rates, but those on fixed-rate repayments have not benefited from the drop in interest at all.
"For most there is a very hefty penalty if they try to switch. One constituent told me his bank is charging him €14,000 to switch from his 12 year fixed rate mortgage.
"It is time the banks played their part. The two main banks have just been backed by the tax-payer to the tune of €7 Billion, with very few strings attached. Others are benefiting from the bank guarantee. One bank is now even State-owned.
"It should be possible for the banks to offer a once off penalty-free switch to a variable rate mortgage to existing customers or to at least reduce the penalty significantly.
"No-one is asking for a free ride, just a bit of fair play.