Homeownership and mortgage costs
Deputy Bacik raised the difficulty of both would-be buyers priced out of homeownership and existing homeowners facing higher mortgage costs. The Taoiseach said the Government would examine the issue, but noted interest rates are set by the ECB and lenders are commercial entities.
I will return to the issue of homeownership. We are all aware that those who aspire to own their homes, and are simply being priced out of being able to do so, are being failed by current Government policy. We all hear from constituents, young and old but particularly those from the younger generation, who cannot afford to buy their own homes and see no prospect of doing so, or of ever being able even to aspire to homeownership here and are looking at emigration as a result. Another group of people, who are already homeowners, are also being failed by current Government policy. These are homeowners who, because of interest rates, are seeing their monthly outgoings on mortgage repayments rising by hundreds of euro every month, with more interest rate hikes in prospect. People despair of being able to budget effectively for their household bills because of this increased outgoing they face every month. They are in homeownership but despair of being able to meet mortgage repayments and are very fearful of what the future holds, if they are not on fixed rates.
Will the Taoiseach consider adopting the proposal of my colleague, Deputy Nash, to cap mortgage rate hikes, and introduce legislation to do so, in order to offer something to that squeezed middle?
Comment on this
We will certainly examine that issue. I am not sure if it is possible for us to cap rate increases. Interest rates are set by the European Central Bank and not by the Government. Of course, banks and lenders are commercial entities and will set a rate that is above the ECB rate because they have to cover both their own costs and the fact some people are not able to repay, which means the cost of that has to be socialised. I appreciate that many people are seeing their mortgages go up and, pretty much every couple of weeks at this stage, are receiving letters from the bank stating that their monthly repayments are going up. That is particularly acute for people who have tracker mortgages. It is important to bear in mind, however, that in some of those cases people are now paying interest rates other people, who were not on tracker mortgages, were paying for quite some time. We need to also bear that in mind.