Vol. 545 No. 1
235 Mr. Higgins (Dublin West) asked the Minister for the Environment and Local Government if he will make provisions to end the situation whereby householders who purchased their homes with Housing Finance Agency loans are locked into a high interest regime. [29859/01]
In relation to fixed interest loans issued by local authorities prior to 1988 which carry rates in excess of current levels, I refer to the reply to Questions Nos. 85, 93, 95 and 513 of 6 November 2001.
In relation to the income related loans issued by the Housing Finance Agency, which are issued at variable rather than fixed interest rates, the intention is that the house purchaser's income, and consequently the repayments, will increase in line with inflation and the loan will be repaid in a reasonable time period. This has been the experience in the majority of cases.
Borrowers are notified each year of their outstanding balance and if it is increasing they are encouraged by the local authority to try to increase their level of repayment. Borrowers with increasing capital balances have the option of either refinancing their loan through a commercial bank or building society or, alternatively, if their income falls as a result of unemployment or short time working, applying for supplementary welfare allowance (SWA). The SWA scheme assists those unemployed or working less than 30 hours a week to cover the interest on their original sum borrowed. The housing finance agency will in these circumstances forego the interest on the difference between the current balance and the original amount borrowed. Under the income related loan scheme the level of redemptions and prepayments are such that the majority of income related loans are being paid off well in advance of maturity.
