“As interest rates continue to rise, the Government has left thousands of borrowers in Donegal at the mercy of banks, despite promises to support those in serious difficulty”, Fianna Fáil TD Charlie McConalogue has said.
In a statement released yesterday, he commented: “I am meeting people every day who fear the cost of surviving week-to-week is being put further and further beyond their reach. The latest increases in variable interest rates by AIB and Bank of Ireland will take even more money out of people’s pockets in the weeks before Christmas. And there is no sign that this Government is prepared to do anything to help.
“As a result of this latest interest rate hike, mortgage holders will have to pay an extra €30 a month for every €100,000 borrowed. The fact that the Government refuses to intervene in any meaningful way is unacceptable.
“The official mortgage data shows almost 11% of occupied properties are in arrears of 90 days or more. But what’s of huge concern to me is the real lives of the people behind those statistics. When you look beyond the headline figures you see that by value, more than one in four (27%) residential mortgages is either in arrears or has been restructured already. On top of that, a recent report by Davy stockbrokers revealed that half of all residential mortgages are in negative equity, including the majority of those taken out since the year 2000.
“The real problem with negative equity is that the banks hold all the cards. If the term on a customer’s fixed interest rate is up the bank can increase the rates, knowing the borrower has no choice because they can’t switch mortgage provider.
“Every time the banks increase interest rates they take more money out of people’s pockets, more money out of the economy and actually push those very borrowers closer or into arrears, causing yet more trouble for the banks. The domestic economy is still in a very weak state and retail sales continue to show a year-on-year decline. How can it be in the best interests of the banks to stop their borrowers from spending in the local economy here in Donegal, helping a local shop in Letterkenny or Buncrana which in all likelihood has loans out from those same banks?
“This Government promised to help borrowers in Donegal but instead what we see every month is more mortgage holders in difficulty and more viable small businesses in the North West unable to get credit from the banks. The bottom line is independent reports that banks are not lending tin the way they should, and when they are lending they are doing so at punitive interest rates. How long are Fine Gael and Labour going to leave borrowers here in Donegal and across the country at the mercy of banks which are showing no mercy at all?”