THE GOVERNMENT was “fully cognisant” of the difficulties mortgage holders were having at present and would be bringing forward additional measures to help them in the next few months, Minister of State for Finance Brian Hayes said.
Speaking to reporters in Dublin yesterday, he pointed out that the Programme for Government proposed that those who bought their residences between 2004 and 2008 should be given an opportunity to get an additional mortgage interest support.
“The Government is actively looking at this issue right now: we have a Finance (No 2) Bill which will be coming into the Dáil in May and it’s a matter for the Government as to whether or not that proposal is in that Finance Bill.
“But we are actively looking at that because they are the people who are really stressed at the moment given the fact that they bought at the top of the market.
“The proposal that we are looking at is increasing from 25 per cent [up] to 30 per cent the amount that one can claim, given the fact that people bought between 2004 and 2008.
“The previous government put in the Finance Bill last year the fact that mortgage interest will go for first-time buyers at the end of this year.
“We were looking at part-funding it, bringing it from June this year effectively meaning that first-time buyers would lose out from the June to December period. All of that is being looked at right now,” Mr Hayes said.
Asked if the Government, given the level of its control over the banks at this stage, would consider instructing them not to pass on the European Central Bank rate increase in the form of higher mortgage payments, he replied: “The first thing the Government did was to restructure the Irish banking system. The only way we are going to get the banks not passing on those increases is to have a totally restructured banking system.
“The announcement of Minister Noonan in the House last week is the first step in that process. Smaller, more cost-effective banks will ensure that we will have more money in place so that those deals can be done between mortgage holders and lenders.
“But I recognise the difficulty that people are facing as a result of this increase, which looked pretty inevitable for quite some time: it is the first increase since 2008, I think.
“Historically, interest rates are very low at the moment, but the Government is fully cognisant of the difficulties that people are in and that’s why we are going to bring forward additional measures over the next few months to help people in this situation.
“There is a code of practice in place which gives very significant rights to people who are facing a stressed time.”
He pointed out that the Expert Group on Mortgage Arrears and Personal Debts chaired by Hugh Cooney of KPMG had put forward a new scheme which allows people to park some of their interest for a period of five years.
“So people need to know there is help out there and that help will continue with the [new] Government. We have demanded from the banks a plan to restructure their entire system.
“We will expect those plans back shortly to the Department of Finance and to the Central Bank,” he said.