Cork MEP warns banks not to use COVID-19 crisis to keep interest rates high

22 May 2020
By Elaine Murphy

Banks want your cash!

Irish MEP Billy Kelleher (based in Cork North Central) has warned Irish banks not to use the Covid19 crisis to keep mortgage interest rates “artificially high” in order to maintain their profit margins.

The Fianna Fail politician, a member of the powerful Economic and Monetary Affairs Committee of the European Parliament issued the warning after a new report said that many mortgage holders might slide into mortgage difficulties over the next number of months.

“The Irish banks have been gouging on homeowners for years, and I am very worried that they will seek to maintain average interest rates at, or just below, 3% to protect their profit margins.

“There has been some progress in recent months in terms of mortgage rates with the latest average now standing at roughly 2.8% having been over 3% in early 2019,” added the Fianna Fáil MEP.

“This is still nearly twice the EU average, and further reductions are desperately needed to bring us into line with homeowners across the European Union.

“I am very fearful of what the banks will do over the next period. Of course, we need to deal with those who go into arrears but maintaining excessive interest rates hurts the Irish economy and makes it more difficult for mortgage owners to repay their debts.

“In February, the President of the ECB, Christine Lagarde outlined very clearly that Irish interest rates should go down, and that more competition in the market is needed to achieve the lower rates that homeowners deserve.

“The Central Bank and the next Finance Minister must insist to the banks that they do not use this cover as a way to keep their rates excessively high. They must also look at competition in the market and break barriers stopping new banks entering into the Irish mortgage market.

“Two of our banks are owned by the citizens. Supposedly, we’re all in this together. We can’t have a return to the anti-consumer practices of the past,” concluded Kelleher.

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