The government are going to find themselves back in murky waters over the vexed question of standard variable interest rates for mortgages in Ireland.
While Mr Noonan did walkabout round the various banks in 2015 suggesting a review of mortgage variable rates, the token measures were implemented and initially quenched the insatiable thirst of the hard-pressed variable rate mortgage holder. Or did it ?
Turns out according to the latest Central Bank figures that the gap between Ireland’s average “floating rate” and the “floating rate” across Europe is 1.35% to the detriment of the Irish mortgage-holder. Is this acceptable ? It may very well result in a return trip to those same banks by the Minister for Finance to request a sharpening of the pencil.
The Central Bank stats reported that the rate on new floating rate loan agreements for house purchase was 3.4% at end-November 2015, representing a decrease of 6 basis points over the month. The floating rates include variable rates and loans with an initial fixing up to one year and also include renegotiations. The equivalent euro rate was 2.05%. In general, an increasing proportion of new mortgage contracts are fixed rate products simply because there are better rates available currently when you fix e.g. best 3 year fixed mortgage interest rate on the market at the moment is Ulster Bank’s 3.2%. Watch this space.