Pepper Finance mortgage rates
Deputy Griffin raised a sharp increase in Pepper Finance mortgage rates and the strain it is causing borrowers. The Minister said he had met Pepper, could not set rates, but had reminded the lender of its obligations to borrowers.
Pepper Finance recently wrote to some mortgage holder to inform them that the interest rate on their mortgages is increasing. In one case with which I am dealing, the rate is rising from 8.74% to 9.24%. That is more than double the ECB base rate. This is a disgrace, it is scandalous and it is putting people who are already experiencing enormous pressure under significant mental and financial strain. It is not right. I am asking the Minister to get in touch with C. Ryan, I. Wigglesworth, J. Farrelly, K. Desmond or A. Agafonova. They are the directors of Pepper Finance and their names are listed at the bottom of the letter to which I refer. Have they any shame? Have they any shame at doing this to people at this time, with an almost 10% annual percentage rate on people's mortgages? Do they know the mental anguish they are putting people through or the financial strain they are putting them under? I ask the Minister to intervene. He should contact those brave directors whose names are at the bottom of that letter. This is an absolute scandal and a disgrace.
Comment on this
I have met Pepper directly ,and my officials are meeting it again this week. Neither I nor the Central Bank have the power to intervene in respect of interest rates. The Central Bank has been clear that it does not wish to have legislative powers in this area. I have, however, reminded Pepper and other non-bank lenders of their obligations to borrowers, including full adherence to the code of conduct on mortgage arrears and the need to work through individual cases sympathetically and compassionately and come up with individual solutions. It has brought forward a new fixed rate alternative repayment arrangement. That is a temporary product which is offered when people are in difficulty with their mortgage. It is at 3%. I encourage customers of Pepper who are genuinely struggling to reach out to it and seek access to that alternative repayment arrangement. I will also be monitoring the implementation of the new code we have agreed on mortgage switching, which is designed to facilitate people in the non-bank sector switching their mortgages to the bank sector.
It will not be an option for everybody but for some people it will be.