Tuesday 20 March 2018

Dublin City Council hasn't passed on last year's mortgage rate cuts

DUBLIN City Council mortgage holders have still not received the benefit of December's interest rate cut, it has emerged.

The European Central Bank cut its benchmark interest rate by 0.25pc for the second month in succession in December.

However, householders who have mortgages from the city council are still paying the higher rate - and will do so until April.

Bureaucratic delays have given rise to the situation, it was revealed.

Fine Gael councillor Clare Byrne, a representative for the South-Central Area, said she has received a number of complaints about the hold-up.

She queried when the local authority got notification of the reduction and why it had not been applied.

In reply, Tony Flynn from the council's loans section pointed out they have 3,000 accounts.

He said that, in May last year, they were notified by the Housing Finance Agency (HFA) about an increase in mortgage interest rates by 0.5pc.

The hike was implemented by the council from August 1.


The HFA - which loans money to local authorities for the purposes of providing mortgages - alerted the city council in November of a 0.25pc rate decrease.

Mr Flynn said the cut was applied to its customers from February 1.

"We have to notify all our account holders to make changes to their standing orders, to their direct debits and we have to write to every one of them. Then we have to adjust the system," he explained.

The local authority was informed of a second mortgage rate reduction in mid-December.

"We'll be implementing that on April 1," he said.

The combined rate cuts at the end of last year meant that a €300,000 mortgage went down by €60 a month.

The Herald revealed in December that homeowners in distress are contacting city officials on a "daily basis", with increasing numbers simply abandoning their properties.

In some cases, borrowers who bought homes using council loans have posted the keys to the local authority and left the country.


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