Vari­able rates so high ‘be­cause thou­sands are choos­ing not to pay their mort­gages’

Irish Independent - - News - Char­lie We­ston

THOU­SANDS of peo­ple who have been pay­ing noth­ing on their mort­gages for years are the rea­son vari­able rates are so high in this coun­try, it has been claimed.

Con­sumer ad­vo­cate Bren­dan Burgess told an Oireach­tas com­mit­tee that some 10,000 bor­row­ers were ex­ploit­ing the fact that there is ef­fec­tively no sanc­tion for not pay­ing your mort­gage.

He said those not pay­ing were ir­re­spon­si­ble.

Vari­able rates be­ing paid by

300,000 bor­row­ers here are the high­est in the eu­ro­zone. The higher rates mean a €200,000 vari­able-rate mort­gage here costs €3,000 more a year to ser­vice than the av­er­age in the rest of the eco­nomic bloc.

“Be­cause there is no ef­fec­tive sanc­tion in Ire­land for the

10,000 or so ir­re­spon­si­ble bor­row­ers, the 300,000 re­spon­si­ble bor­row­ers pay their mort­gages for them,” he told TDs and sen­a­tors on the Oireach­tas Fi­nance Com­mit­tee.

Mr Burgess used Cen­tral Bank fig­ures which he claimed showed that around 10,000 mort­gage hold­ers are more than five years in ar­rears. He said most were choos­ing not to pay. This is what some com­men­ta­tors call “strategic de­fault­ers”.

But debtor ad­vo­cate David Hall dis­puted the 10,000 fig­ure, and said they it was un­proven and did not stand up to scru­tiny.

Mr Burgess said non-pay­ment does not hurt the lenders, in­stead it hurts the other bor­row­ers.

“The lenders use the dif­fi­culty in re­pos­sess­ing houses as an ex­cuse for charg­ing more. When over­seas lenders look at the Ir­ish mar­ket and see that it takes years to re­pos­sess a home from a de­faulter, they stay well away,” he said.

There should be a fast-track re­pos­ses­sion sys­tem for those who had not paid their mort­gages for years, Mr Burgess said.

He told com­mit­tee chair­man John McGuin­ness just 2,476 res­i­den­tial prop­er­ties had been re­pos­sessed by court or­der since 2009. Most of these were empty and aban­doned.

Bren­dan Burgess wants fast-track re­pos­ses­sion

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