Tanaiste Eamon Gilmore has pledged to challenge banks if they fail to reduce their mortgage interest rates in line with European Central Bank cuts.
He challenged the country’s financial institutions to pass on the rate cuts to variable rate mortgage holders shortly before the ECB announced a cut of 0.25% in its rate today.
“This Government will act decisively, forcefully and effectively with the banks and anybody else in the interests of those who hold mortgages and are having difficulty repaying them,” said Mr Gilmore.
AIB and Bank of Ireland both refused to implement last month’s ECB rate reduction, claiming they had not increased their rates when the ECB did but AIB eventually folded under pressure from Taoiseach Enda Kenny.
“When the last decrease occurred, the Government called in the banks. If necessary we will do that again,” the Tanaiste went on.
Mr Gilmore said he was hopeful the banks would pass on the rate, but Sinn Fein TD Pearse Doherty said hope was not enough.
“You are in power, you have the power to cut social welfare rates, to cut child benefits,” said Mr Doherty. “You also have the power to instruct the banks to pass on this rate. So act in the public’s interest.”
Mr Doherty called for the Tanaiste to guarantee to mortgage holders that the Government will bring in legislation forcing banks to pass on the ECB rate.
Mr Gilmore said the Government would take action, adding: “This Government is not only concerned about the issues and the difficulties that are faced by people with their mortgages, we’ve taken action on it and we are continuing to take action on it.”
The ECB implemented a 0.25% cut in November and followed it up with a similar cut today to leave their rate at 1%. If this is passed on by Irish banks, the average Irish tracker mortgage holder could save as much as €700 a year.