Brian Hayes MEP: ''Excessive' variable mortgage rates should be investigated'

'Excessive' variable mortgage rates should be investigated

“Excessive” [broken link removed] being charged by banks in Ireland, should be investigated by the Competition and Consumer Protection Commission, Dublin MEP [broken link removed] has said.

Central Bank data published recently showed the average rate of standard variable mortgages in Ireland was 4.26 per cent, well above the 0.05 per cent rate charged by the European Central Bank.

“We can now say with certainty that Irish homebuyers are being ripped off by banks, particularly when you consider the euro zone average variable mortgage rate which is 2.47 per cent,” Mr Hayes said.


“It is welcome that the Central Bank has finally published the true average variable rate in Ireland. Up until recently, the variable figures that the Central Bank provided were distorted by the inclusion of ultra-low interest rate tracker mortgages which have been restructured.”

Mr Hayes said the Competition and Consumer Protection Commission, set up in October 2014 from the merger of the Competition Authority and the National Consumer Agency, should investigate the rates being charged.

Will the Competition Commission investigate. Who decides what they investigate.

Investigating mortgage rates not ‘best use’ of resources, consumer body tells MEP

Commission rejects Brian Hayes’s call to investigate ‘excessive’ variable mortgage rates

In a response dated March 3rd, [broken link removed], chair of the commission, acknowledged that “insufficient competition remains a problem in the Irish banking sector” since the financial crash and the bailout of domestic lenders by the State.


Competition needed
“More robust competition is key to ensuring that keenly priced financial products are available to consumers while allowing the banking sector to achieve a healthy and profitable state,” Ms Goggin said.
But she said the commission “has no current plans to undertake any work in this area”.

To do so is “not considered the best use of our resources given the ongoing structural problems in the Irish banking sector,” she added.

Ms Goggin said this is primarily a matter for the Central Bank and the Department of Finance.

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Mr Hayes expressed his disappointment the commission would not investigate the SVRs being charged by Irish banks.

“This is the biggest issue facing Irish consumers at the moment,” he said. “There needs to be proper oversight. It would make sense for this independent body, which was set up to defend consumer rights, to conduct an inquiry into variable mortgage rates.”

He noted that the Central Bank recently published figures showing that the average variable rate in Ireland is 1.79 per cent higher than the euro zone average.

Insofar as the current high interest rates on variable mortgages are providing the banks with a bulwark against the loss making Trackers and ultimately improving their financial position, it's hard to see the Government/State agitating for reduced variable rates on the Banks, given their indebtedness to the taxpayer. The more profitable the banks become (albeit at the expense of the variable rate mortgagee) the quicker the State recoups its stake in these banks ? Or is this too simplistic a view ? Perhaps the high variable rate issue (and what the Government is prepared to do for those held to ransom by these rates ) needs to become a doorstep issue in the upcoming election campaign ? Well done to Brendan for his campaigning to highlight this issue, maybe its time for variable rate mortgage holder anger to "turn up the heat" on our elected representatives on this one ?