Monday 24 October 2016

Banks which refuse to slash rates may face sanctions

Joan Burton
Joan Burton

SANCTIONS for banks that consistently refuse to slash variable rates for mortgage customers are on the table ahead of next month's Budget.

However, there has been a marked change of tone among Coalition figures in recent weeks over whether to hike the current bank levy as a means of punishing lenders.

Moves to increase the €150m bank levy was discussed at the highest level of Government towards the end of the last Dail term.

But ministers are now stressing the fact that banks are putting forward a number of "options" for variable rate customers as a means of reducing monthly payments.

Finance Minister Michael Noonan said last week that it is up to borrowers to change mortgage provider if they are not satisfied with the options being offered.

He said that he believes increased competition in the market in the future will provide the best incentive for banks to slash variable rates.

Nonetheless, Tanaiste Joan Burton yesterday said an increase in the levy remains "under examination" ahead of the Budget on October 13.

"I certainly think that when you look at the variable interest rates and you compare them to the rates at which banks are borrowing at, there's an enormous margin there.

"I certainly think it's possible to give people who are on variable rate mortgages, in a number of cases, a much better deal," Ms Burton said.

Meanwhile, Mr Noonan has refused to be drawn on specific measures on tackling spiralling rental costs in Ireland, insisting the proposals on controlling the rental market, are still at senior civil servant level.


It's been reported that landlords risk fines of up to €15,000 if they refuse to take tenants who claim rent allowance under new legislation due to come into effect in coming weeks.

There has also been reports that the new laws designed to encourage rent certainty will force landlords to fix rental rates for a specific periods.

However, when asked about proposals to regulate the house rental market in Limerick yesterday, Minister Michael Noonan said no decisions have been made.

"There are no decision made, various ideas are being kicked around and there are very solid proposals coming in from the Department of Environment."

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