The European Central Bank (ECB) says it cannot investigate high variable mortgage rates in Ireland because it is beyond its mandate.
Fine Gael MEP, Brian Hayes, on behalf of all 11 of Ireland’s members of the European Parliament, sent a letter to ECB chief Mario Draghi requesting him to examine Irelands high variable mortgage rates.
In their letter, the Irish MEPs said that some banks are still charging more than 4% for a standard variable mortgage product, despite the fact that the ECB’s main refinancing rates for banks is 0% and the average standard variable rate across Europe is 2.05%
They asked Mr Draghi to investigate why the six major lenders in our banking market are not passing the main ECB refinancing rate on to their customers when it comes to mortgages, but applying it to deposit savings rates. However, Daniele Nouy the chair of the ECB’s Supervisory Board, responded to Mr Hayes and said that an investigation by the ECB is not on the cards as it would fall outside the ECB’s mandate.
He said that such an investigation should be a matter for the competition authorities but that the ECB would have to be consulted on any proposed legislation by the Government to regulate rates. This would apply to the Central Bank Variable Rate Mortgages Bill which was passed by the Dáil last month giving powers to our Central Bank to regulate mortgage rates.
The answer is simple – shop around. Cheapest variable rate available on the Irish market is 3.15% while you could still be paying 4.5%+ on certain mortgages, a difference of 1.35% or 30% cheaper. Better in your pocket – contact this writer for more details.