asked the Minister for the Environment if, in view of the alleged substantial inflow of deposits to the Irish building societies, the Government have approached these societies with a view to a reduction in their current mortgage interest rates.
Ceisteanna—Questions. Oral Answers. - Mortgage Interest Rates.
20.
I am aware that there has been a substantial increase in the net inflow of moneys to building societies recently which, I understand, may be mainly due to the repatriation of assets consequent on Ireland's intending entry to EMS. For that reason, the increased inflow may only be of a temporary nature.
Building societies' mortgage rates are determined from time to time by the rate which they offer investors which, in turn, is determined by the rate which other deposit-taking and lending financial institution offer their investors. While the investment rate being offered by other competing institutions, in particular the associated banks, continues to remain at its present level and the demand for house purchase mortgage finance remains strong, I have no intention of approaching building societies on the question of their mortgage interest rates.
Arising out of the Minister's reply, am I correct in translating it to mean that people who have mortgages with building societies have no hope of a reduction in the interest rates?
It varies with the fluctuations in the bank rates as the Deputy is aware. They have come down. They went up slightly last year. They have to compete with the banks.
(Cavan-Monaghan): Mortgage interest rates are at an all time high at the moment.
That is not so. They were slightly higher during one period of the Coalition Government's term in office.
What period?
Question No. 21.
Arising out of the Minister's reply, could he indicate to the House that, if our entry into the EMS, which hopefully will come sooner rather than later, does not produce the forecasted reduction in overall bank lending interest rates, as indicated in this House, he will take steps to subsidise interest rates as was done by the previous Government?
That is a separate question.
I have no plans to do that at present.