Banks are being given ‘free pass’ to squeeze mortgage holders, Sinn Féin says
Sinn Féin finance spokesman Pearse Doherty said the Government should call in the banks to its offices to demand that they stop withholding the benefit of lower rates from mortgage holders.
He claimed the banks have not passed on the full benefit of any of this year’s four ECB rate cuts to their customers.
“Government is standing by and letting banks rip people off in the middle of a cost-of-living crisis,” Mr Doherty said.
“Despite four rate cuts this year, the banks have not passed on the full benefit of even one of those rate cuts yet.
“It is a scandalous cash grab that is hurting households and first-time buyers.”
He said banks refusing to pass on the benefit of ECB interest rate cuts is unacceptable and the Government should immediately call in the banks.
“Instead, they are giving them a free pass meaning banks can continue to squeeze workers and families by keeping interest rates far above the EU average,” he said.
Sinn Féin finance spokesman Pearse Doherty said the Government is giving banks a ‘free pass’. Photo: Gareth Chaney
Today’s News in 90 Seconds – September 16th
“That means higher mortgage payments without justification in the middle of a cost-of-living crisis.”
The ECB cut rates by 0.25 percentage points four times this year, on top of four cuts last year.
“These same banks are recording record profits and being allowed to pay almost no tax,” Mr Doherty said.
“The Government must get on to the side of the public and consumers and stand up to the banks.”
In May, there was a rate reduction of up to 0.75 percentage points on all of AIB’s non-green fixed rate mortgages.
Its subsidiaries Haven and EBS recently cut their rates too.
But mortgage experts said many of the AIB Group mortgage rates remain above the average for the market, which the Central Bank said last week was now 3.6pc.
We will continue to keep our mortgage pricing under review to ensure we remain competitive
PTSB cut its rates at the start of the year.
Daragh Cassidy of mortgage brokers Bonkers.ie said: “It’s true the banks haven’t passed on all the ECB reductions, i.e. the full two percentage points. But they didn’t pass on all the increases either.”
Both AIB and Bank of Ireland had no comment when Mr Doherty’s statement was put to them.
PTSB said as the ECB rate increased, it did not raise mortgage rates at the same pace.
“We also made a number of reductions to our mortgage rates over the past two years, most recently at the start of this year when we announced significant reductions to our fixed-rate product suite of between 0.15 percentage points and 0.95 points,” it said.
“We will continue to keep our mortgage pricing under review to ensure we remain competitive.”
Earlier this week the Central Bank of Ireland said average mortgage rates were unchanged in July from the previous month at 3.6pc.
This leaves rates at their lowest level since March 2023.
But the prospect of further mortgage rate cuts in this market is slim after the European Central Bank left its rates unchanged last week.
And markets are not now expecting any more ECB rate cuts this year.
Olga Brindley of Nua Money said: “Given there appears to be a limit to the extent to which the ECB might cut its rates in the foreseeable future, fixed rates could become even more appealing to Irish borrowers now, as they become less concerned about losing out on the cheaper mortgages that sometimes follow an ECB rate cut.”