Taoiseach Simon Harris has encouraged the country’s banks to pass on reduced monthly mortgage repayments as quickly as possible as interest rates begin to fall.
The Taoiseach has recently concluded a series of meetings with banks credit unions and non-bank lenders in which he discussed a number of issues, including mortgage interest rates, the housing sector and finance for small and medium-sized businesses.
In a statement following the series of meetings Mr Harris said he urged urging lenders to take a “responsible approach” to passing on falling interest rates to customers.
The Taoiseach said: “I was keen to hold these meetings given the importance of banking to people’s everyday lives. I know that people are still hurting due to the cost of living. Inflation has eased, but it doesn’t mean prices are coming down or it’s any easier to make ends meet.
“For our part, the Government will continue to help with the cost of living, with more measures due to take effect in September and to be announced in the forthcoming Budget.
“Despite the ongoing cost of living pressures, I received a relatively upbeat assessment on the overall economic situation and limited evidence of any recent increase in mortgage arrears. Nonetheless, a clear message from both the Government and the banks is that anyone who does face difficulties meeting their mortgage repayments should engage with their lender at the earliest possible stage.”
The Taoiseach said it was important that people felt the impact of falling rates as the ECB implements further cuts.
“As we enter a new phase in the interest rate cycle, I want to see people feel the benefits of reduced monthly repayments as quickly as possible.
“I believe monthly repayments should fall just as quickly as they rose. It is, of course, a commercial decision for each bank reflecting their different funding arrangements, but I emphasised the need for a responsible approach and it’s something the Government will monitor over the coming months.
“Demand in the mortgage market is strong and will be for the foreseeable period, and there are welcome signs of greater competition in the market in the period ahead which should also help ensure lower costs for consumers. This will also present opportunities for customers to switch to cheaper providers, something the Government will continue to encourage.
“There was also strong backing for the Government’s move to build 50,000 homes per year and I’m encouraged that the banks are keen to make more development finance available to help us scale up delivery to this level. As the Housing Commission has emphasised, private investment in the housing sector is crucial as we step up our level of ambition on housing.
“We discussed the banking needs of our small and medium-sized businesses and our farmers. I know that they are under pressure too and Government, working with the banking sector, will continue to work on new ways to help them not only survive but prosper.
“I’m a big supporter of the role of credit unions, so I was happy to hear their ambitious plans to expand, including growing their mortgage offerings. While they welcomed recent legislation in this area, I will be following up several matters they raised.”
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