Kilkenny City Labour Party candidate, Sean Butler, called upon the Government to link the need for banks to show flexibility on fixed rate mortgages to further bailout funding for the banking sector.
“It is not good enough for Irish banks to seek to be bailed out by the Irish tax payer on one hand and then seek to enforce unfair mortgage agreements on the same tax payers. The bank bailout scheme must work two ways” commented Mr Butler.
“Irish banks in the last number of years recommended, particularly to younger mortgage holders, that they take out fixed rate loans. Householders were told this would protect them against rate increases. What we have seen is that because of reckless trading from the global and Irish banking sector, the European Central Bank was required to reduce the lending rate to a record low. Householders who took out the fixed rate mortgages now find themselves at a huge disadvantage compared to householders on variable and tracker rate mortgages. Many fixed rate loans have been set at above five per cent compared to many tracker rate loans which are in the region of 2.25 per cent. Speaking to householders during my city wide canvas, people are telling me that their banks are quoting penalty figures in the region of €6,000 if people wish to switch to cheaper variable mortgages. When you see the banks queuing up to seek taxpayers’ money to stay afloat it is sickening to see the same banks enforcing outdated loan rates on the same taxpayers” Mr Butler added.
“Our local TDs must put pressure on the Government to force the banks to allow people to switch free of charge to lower cost loans. Put quite simply if the banks are not willing to work with already hard pressed mortgage holders, then tax payers funds should be withheld from these banks. Allowing householders to switch to lower cost loans would see an increase in disposable income in many households of €250 to €300 per month. This would also help generate economic growth through increased consumer spending. It would also reduce the amount of people defaulting on their home loans as the repayment amounts would be much lower. The banks caused our current crisis, now they must play their part in getting us out of the crisis. Nothing less should be accepted by the Government,” concluded Mr Butler.
