Interest relief must be given to borrowers

WORKERS and families have been dealing with a spiralling cost of living crisis for more than a year.

High inflation is putting a squeeze on households already contending with high costs in housing, childcare and much else.

To control inflation, turbocharged by Russia’s invasion of Ukraine as energy markets were plunged into turmoil, increasing the cost of electricity, gas, oil and goods dependent on them for their production, the European Central Bank responded by hiking interest rates.

Tens of thousands of mortgage borrowers will see repayments rise by thousands this year.

It is time to introduce targeted and temporary mortgage interest relief to support them.

Since June, the ECB has increased main lending rates five times – it is now 3.5 percentage points higher than at the beginning of last summer meaning monthly mortgage repayments for many now are hundreds of euros higher than they were then.

HIKES

There are more than 700,000 outstanding mortgage accounts on primary homes and tens of thousands of borrowers have felt the full brunt every ECB rate hike.

Since June, monthly repayments for someone on a tracker rate with an outstanding mortgage balance of €150,000 has increased by €2,600 per year.

Then there are borrowers whose mortgages were sold to vulture funds – 100,000 mortgages are held with non-banks, with 65,000 of them on tracker or variable rates.

Vulture funds have hiked rates aggressively, with some seeing interest rates climb as much as 7.5% and repayments increasing by over €4,800 per year.

Today Sinn Fein will bring a motion to the Dail to introduce targeted and temporary mortgage interest relief for 12 months to absorb a portion of borrowers’ increased interest costs.

This would be 30% of the increased interest costs compared to June last year, with the total relief capped at €1,500. For example, where a borrower’s interest costs will be €3,000 higher this year, they would receive relief of €900.

Struggling borrowers must supported.