Paul Murphy: Calls for Central Bank Cap on Rising Mortgage Rates
Paul Murphy warned mortgage holders face rising costs as interest rates climb, citing 7% inflation and high Irish mortgage charges. He accused banks of profiteering, opposed AIB privatisation, and urged empowering the central bank to cap mortgage interest rates.
Mortgage burden and cost of living
Paul Murphy said mortgage holders could face extra mortgage charges of 1,000 euros a year as interest rates rise and pointed to CSO data showing inflation at 7%. He described the situation as the sharpest cost of living crisis squeezed for ordinary people since the 1980s and noted that Irish banks charge some of the highest mortgage rates in the eurozone, with average borrowers paying more than 2,000 euros a year compared to counterparts in other European countries.
Allegations of bank profiteering and bailout legacy
He argued that banks bailed out by the public are now hugely profitable and called the resulting behaviour profiteering. He said that profiteering must be stopped and framed high mortgage costs as part of that issue.
AIB privatisation and public ownership
Paul Murphy criticised the government's push to privatise AIB and said the banking sector should instead be brought into public ownership. He proposed banks be run on a democratic, not-for-profit basis as a public utility rather than pursued for further privatisation.
Call to empower the central bank
He asked the Tánaiste to at least act now to empower the central bank to cap the interest rates that can be charged to mortgage holders, presenting this as an immediate measure to protect borrowers.
Government reply on banks leaving and comparative factors
The Tánaiste replied that a large number of banks are leaving the country, citing tens of thousands of customers of Ulster Bank and KBC seeking new banks. He argued banks leave partly because they could make more profit elsewhere, and noted that while interest rates are higher in Ireland, bank charges are lower and signing fees common elsewhere do not exist in Ireland. He also said Ireland has a much lower level of repossessions, which can have a knock-on effect of socialising cost into higher interest rates.
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Thanks, Cairn Comhairle. Tanaiste, mortgage holders could be facing extra mortgage charges of 1,000 euros a year as interest rates rise. This is the latest part of the cost of living crisis. We hear from the CSO that inflation has hit 7%. It is the sharpest cost of living crisis squeezed for ordinary people since the 1980s. And that is in a context that Irish banks are already charging the second highest rates for mortgages in the eurozone. Average borrowers paying more than 2,000 euros a year compared to their counterparts in other European countries. These are the banks that were bailed out by the public and are now again hugely profitable. It is profiteering, pure and simple, and it should be stopped. The government is pushing ahead with privatisation of AIB when in fact the banking sector should be brought into public ownership and run on a democratic, not-for-profit basis as a public utility. But will you at the very least act now to empower the central bank to cap the interest rates that can be charged for mortgage holders? Thanks, Deputy. In case you hadn't noticed, a large number of banks are leaving the country. At the moment there are tens of thousands of individual customers and business customers of Ulster Bank and KBC trying to find a new bank. And among the reasons as to why those banks are leaving the country is, while they can make profits here, they actually would make more profits for their capital in other countries. And that is one of the stated reasons as to why they are leaving Ireland. It is true that interest rates are higher in Ireland than they are in other eurozone countries. It is also true that bank charges are lower, and there are signing fees that do not exist in Ireland. And it is the case in Ireland, and this is a good thing by the way, that we have a much lower level of repossessions. And that does have a knock-on effect of socialising the cost of that in higher interest rates. So there are many reasons as to why interest rates in Ireland are higher than they are in other European countries. So there are many reasons as to why interest rates in Ireland are higher than they are in other countries.
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