Dáil Éireann debate -
Wednesday, 20 Sep 2023

Vol. 1042 No. 3

Mortgage Interest Relief: Motion

Deputy Pearse Doherty

I move:

That Dáil Éireann:

recognises that:

— the cost-of-living crisis is exacting enormous pressure on household finances; and

— mortgage costs are among households’ largest monthly expense, with the unprecedented and sustained rise in interest rates resulting in significant financial pressure for households;

notes that:

— on 20th September the European Central Bank will increase its main lending rate for the tenth time since July 2022, from 0 to 4.5 per cent;

— the Central Bank estimated that, prior to this most recent rate rise, 20 per cent of households would see their annual mortgage repayments increase by more than €3,000, with a further 20 per cent of households seeing their annual mortgage costs increase by more than €5,700;

— according to the Central Statistics Office, mortgage interest costs rose by 51.3 per cent in the 12 months to August;

— at end of June, over 78,000 mortgage accounts were held by vulture funds, with a cohort of these mortgage holders having seen their interest rate rise to as high as 10 per cent;

— a wider cohort of mortgage borrowers, including first-time buyers, face or are likely to face further increased mortgage repayments; and

— the retail banking sector is estimated to record combined operating profits in excess of €5.1 billion, an increase of 97 per cent compared to 2022;

further notes that:

— the Government has refused to introduce temporary and targeted mortgage interest relief to support households struggling with rising mortgage costs;

— Fine Gael and Fianna Fáil supported the sale of mortgage loans to vulture funds without the consent of mortgage-holders; and

— the Government reduced the banking levy in 2022; and

calls on the Government to:

— introduce targeted and temporary mortgage interest relief to support homeowners facing significant increases in their mortgage costs;

— provide mortgage interest relief, applicable to principal private residences, equivalent to 30 per cent of increased interest costs relative to June 2022, with a maximum benefit per household of €1,500 per annum;

— increase the banking levy and use the proceeds of that increase to support households through the introduction of temporary and targeted mortgage interest relief; and

— develop a clear plan to facilitate the reintegration of mortgage holders with loans held by vulture funds into the mainstream mortgage market.

Mar is eol don Leas-Cheann Comhairle, le bliain anuas, tá méadú suntasach tagtha ar rátaí morgáiste d'oibrithe agus do theaghlaigh ar fud an Stáit. Mar is eol dúinn, le 15 mhí anois mhéadaigh an Banc Ceannais Eorpach a phríomhráta úis deich n-uaire. Tá a fhios againn go léir cén fáth go bhfuil seo déanta. Ní féidir linn neamhaird a dhéanamh den tionchar atá aige seo ar oibrithe, ar teaghlaigh agus ar daoine amuigh ansin.

Roimh an ardú rátaí is deireanaí, measadh go n-ardódh costais bhliantúla morgáiste do 20% de theaghlaigh le breis is €5,700. Do 20% eile, chuaigh an costas a baineann le déileáil lena gcuid morgáistí suas €3,000. Tá rátaí úis anois chomh hard le 10% i measc na teaghlaigh ina raibh a gcuid iasachtaí díolta ag na creach-chistí, cinneadh a ghlacadh cúpla bliain ó shin le tacaíocht ó Fhine Gael agus ó Fhianna Fáil. Ta tacaíocht de dhíth ar na teaghlaigh atá ag streachailt, agus is féidir an tacaíocht sin a thabhairt dóibh. Tá an t-am anois le haghaidh a thabhairt ar an pholasaí agus ar ghníomh a dhéanamh an polasaí agus an plean atá ag Sinn Féin le faoiseamh úis morgáiste sealadach a thabhairt isteach.

For more than a year, households have been struggling with a cost-of-living crisis. For many households, their single biggest expense is servicing their mortgage and keeping a roof over their head. In the past 15 months, the European Central Bank, ECB, has increased its key interest rate ten times. We all know the reasons for this but we cannot ignore the impact this is having on workers, families and households across the State.

In the past 15 months, mortgage interest costs have increased by a massive 54%. Before the most recent interest rate hike this month, the Central Bank estimated that one in five households, which is 20% of all households, would see their annual mortgage costs increase by more than €5,700 compared to last year. It estimated that a further one in three households would see their annual mortgage costs rise by over €3,000 and a further one in three households would see their annual mortgage costs rise by over €1,500. This is a massive income shock for middle and low-income households across this State.

We know that over 80,000 households have had their mortgages sold off to vulture funds without their consent - sales that were supported at the time by Fine Gael and Fianna Fáil through the blocking of my legislation. These households were told by the Taoiseach that they would be no worse off once their mortgages were sold. As I warned at the time, the sale of mortgages to vulture funds would leave these households exposed to higher interest rates. This, unfortunately, has come to pass. These mortgage prisoners are now paying interest rates as high as 10%.

On 4 August, I called on the Minister for Finance to convene a meeting with the Central Bank and the banking sector to chart a path for these mortgage holders to return to the mainstream mortgage market. The Minister convened that meeting on 31 August. However, I have serious reservations about the effectiveness of the measures that were announced. These mortgages should never have been sold in the first place. What is clear is that struggling households need action and they need it now.

For months, Sinn Féin has called for the Government to act, get its head out of the sand and introduce targeted and temporary mortgage interest relief. That is exactly what this motion calls for. This motion calls for Sinn Féin’s plan to support these struggling mortgage holders to be introduced. Our plan would support households with 30% of their increased interest costs since June 2022, capped at a maximum benefit of €1,500 for each household that qualifies over the course of the scheme. This plan would not insulate households from the full impact of rising interest rates but it would provide relief and support to those facing what is a massive income shock.

Our plan is affordable and, more importantly, it is necessary. We are now in a situation where the retail banking sector is expected to make combined operating profits of more than €5 billion this year. Its profits are expected to double compared to last year. In this context, the banking levy should be increased and the proceeds could and should be used to support struggling households. This is a sensible and necessary proposal that can be delivered and deserves meaningful support from all sections of this House. I am disappointed but not surprised that the Government continues to ignore the plight of mortgage holders and will vote against this motion. When will the Minister for Finance understand what is happening out there and the fact that he needs to act? He has delayed for far too long.

Deputy Thomas Gould

Does the Minister know the fear many people felt last July when the first interest rate hike was announced? Can he imagine the fear they felt last week when the tenth interest rate hike was announced? These are families who are struggling and are waiting on the Minister. A man who lives in Cork contacted me. His current mortgage interest rate is double what it was 18 months ago. He said "I am hoping Cork politicians will talk to Minister McGrath and get him to see sense and tackle the banks while helping mortgage holders, who are sinking fast with every new bill that is coming in. Only Pearse Doherty is standing up for us." Those are his words, not mine.

The Minister is telling people to wait for the budget. They have been waiting for over a year. They need this Government to support them now. They need help. Many people have struggled with all these interest rate hikes and now they are looking at a winter with unaffordable mortgages, unaffordable electricity and gas bills and unaffordable food prices. Where is the help? Do you know what they have said to me? Hard-working people and families have told me that they got an education, went to college, got an apprenticeship and became an entrepreneur. They did everything right. They work every hour that God sends and the one time they need help, this Government fails them and fails to step up. Where is the help for all the hard-working people in this country who get up every day? I am reminded of the Taoiseach's famous line about the people who get up early in the morning. They are telling me that this Government has forgotten about them. Does the Minister understand how tough it is for people right now? He will probably dismiss Deputy Doherty once again as he did when the Deputy raised the issue of insurance companies ripping people off. The Minister will probably dismiss him again as he did when he told the Government what was going to happen with the vulture funds. I am asking the Minister to listen to Deputy Doherty because this is common sense and really supports the people who are struggling.

Deputy Rose Conway-Walsh

For months, we have been asking the Minister to do the right thing by homeowners. These are the same homeowners who Fianna Fáil and Fine Gael purport to support and hold in high regard. As each month goes by, people realise that these are just empty words and that lip service is being paid to these struggling mortgage holders, who cannot afford to continue with the crippling rates they are being charged, the ten interest rate rises they have had to experience and the significant income shock. Fianna Fáil and Fine Gael saw off the selling of 78,000 mortgages to vulture funds. We know from the Central Bank that 22,000 of these were not even in arrears. They were never in financial difficulty and yet they were sold off without the consent of the homeowners. For the past number of years, Fianna Fáil and Fine Gael have supported EU legislation to empower vulture funds and weaken the national government's ability to protect these same homeowners. Now those same homeowners who were thrown to the vulture funds are being torn apart by interest rates of up to 10%. We know from Central Bank statistics that the number of homeowners with vulture funds who are paying over 6% has increased drastically. The Minister has the same information. He knows how much they have increased by - about 19% - in the past couple of months.

The Government cannot stand by and do nothing. We have outlined to the Government what needs to be done regarding the retail banks taking back these mortgages. Again, we asked the same question today of the Central Bank. The Minister knows the criteria involved in taking back these mortgages but there seems to be obfuscation around all this and a do-nothing attitude that leaves these homeowners to the wolves. What we are asking for is sensible. It is temporary and targeted mortgage interest relief. Given that it is the same type of mortgage interest relief that Fianna Fáil supported before it was in government, this do-nothing approach cannot continue.

We know that the mortgages people are paying in this country are 52% higher than the average EU mortgage rate. I appeal to the Minister, the Government and Deputies in County Mayo to stand up for these homeowners who are trying to find hundreds more every month just to meet their mortgages. We have control over what can be done here. It has to be done. We cannot continue doing nothing.

Deputy Réada Cronin

I am glad to be able to speak on this Private Members' Bill this evening because there is so much pain behind the closed doors of north Kildare. It was good to have the opportunity to focus completely on the constituency over the past couple of months. People are living on ordinary wages and paying extraordinary mortgages for a standard home. I was talking to a woman in her 50s this morning who used to work full-time and is now working part-time because she cannot afford the after-school childcare. It cost more than her salary and she simply could not afford to work full-time anymore. Ten rate rises on, her high mortgage on an ordinary three-bedroom semi-detached house in north Kildare has eaten up her part-time salary, leaving her effectively working for nothing. She and her family have never missed a mortgage repayment and now they are really worried about whether they will be able to keep up their repayments. With three kids still in school, they are terrified they could lose their home. She has heard me talking about the number of people who are facing that predicament in north Kildare.

For months, we have been calling on the Government to do the right thing and to bring in time-limited interest relief on the rate rises while people are struggling. They are really struggling, even with two wages coming into the house, with the current crisis in the cost of living and in energy prices. You need not bother coming out your front door now unless you have €50 in your pocket. Going into the supermarket, you will be very lucky to get away - if you have any size of family at all - with spending less than €100. Everything is money; mortgages, uniforms, heating, electricity, the food shop, shoes and the doctor. If you have to go to the dentist, you nearly need to go for a credit union loan. People are getting hammered by all the things they cannot give up. These are things that are not luxuries, namely, a roof over their heads, food, heat, and keeping their kids in clothes and shoes that still fit them. I really wonder about this Government. Is it conducting some kind of social experiment on ordinary working people who are hammered by ten interest rate increases? Is it seeing how long people can actually bear it and how much more they can take or endure? This is what it feels like and what people are telling me they believe. When I talk to people across north Kildare, they tell me they are working harder than ever but have less and less to show for it because every penny is going on mortgage increases and the increase in the cost of living. For goodness' sake, I ask the Minister to do the right thing and to accept Sinn Féin's Private Members' Bill. I ask him not to oppose our motion and give people a hand with the rate increases, not another wallop. People cannot endure much more of this Government.

Deputy Martin Kenny

We are here again after over a year of continuous interest rate increases which people have had to try to bear. I say this in the context of the huge cost-of-living pressures across almost every sector. All the household needs for which people have to pay, such as the cost of putting fuel in their cars or insurance, have gone up and up. One of the areas on which the Government does and can have an impact is mortgage interest. There were mortgage interest relief schemes before; they can be brought back again. The schemes can be targeted and limited and can do exactly what they need to do in order to give the people who are finding it the most difficult some relief. However, the Government continues to play politics with it and refuses to do it. I often wonder if it is simply because the Opposition is asking for it. I noticed what I thought was going to be a road to Damascus conversion last week - I am not sure if it was in Tipperary or where it was - but seemingly the road to Damascus turn did not happen because the Government is not going to do anything after all. We want to see the Government stepping up and recognising that the people are really hurting and are in trouble. It is costing them hundreds of euro more per month to pay their mortgages.

A family with a 30-year mortgage that they got in 2009 came to me in my constituency. They are finding it difficult at this stage. They have children in college. They are at the period now when they need to get some relief. They cannot manage and they are asking why the Government is not doing something for them. These are the people we often talk about. They earn too much to get anything or to meet any of the criteria for any of the things that are being offered. Yet they are the ones who are working hard, paying their taxes and doing everything right. When it comes to it, the ECB introduces an interest increase for global reasons which are about the problems that are related to inflationary measures - energy and oil and all of that - and are driving all of this inflation. Who do these increases affect? Those very people. That is the problem here. The Minister needs to recognise that it is his constituents, the people who previously voted for Fianna Fáil throughout their lifetimes, who are coming to us asking why nothing is being done and why this Government is letting them down. He needs to recognise that and do something for them, not because we are telling him to do so but because it is the right thing to do for the people who are suffering hard. Too many people are saying to us that this Government has to go. This Government needs to be changed because it does not listen to common sense. That is exactly what it needs to start doing. It needs to recognise that there needs to be an ounce of common sense introduced into all of this. This is an opportunity to do that. The motion Sinn Féin is proposing seeks to get the Minister to introduce a package of mortgage interest relief in next month's budget for people who are the most pressed and need it. I ask him to step up to the mark and recognise his responsibilities, not to the Government or anybody else, but to the ordinary people out there who are suffering hard.

Deputy Pa Daly

Over the past year, 20% of households have seen mortgage repayments increase by over €3,000. Another 20% of households have seen repayments increase by more than €5,700. Mortgage interest rates rose by over 54% in the past year, while the retail banking sector has almost doubled its profits to €5 billion. This tallies with the experience of the people I spoke to this week in County Kerry. In the last year, the mortgage of one couple with two children in college has increased by €600 per month. The mortgage of another woman, who is a single parent, went from €1,330 per month to €2,000 per month with a vulture fund. This is in a county where disposable income consistently ranks below the national average, and where people are struggling with the cost of living, with fuel costs which have recently increased and with food prices. This is in a State where 30,000 people are in mortgage arrears and 78,000 mortgages are held by vulture funds, some of which are on rates as high as 10%. This, of course, was all facilitated by the Government.

We must remember two things. Despite being consistently asked, the Government has refused to introduced temporary targeted mortgage interest reliefs in order to deal with rising mortgage costs. Fianna Fáil and Fine Gael supported a number of breaks for those vulture funds, supporting the sale of mortgages to vulture funds without the consent of mortgage holders, giving vulture funds an exemption from stamp duty, and then giving other tax breaks on renting properties, all the time exposing struggling mortgage holders to higher interest rates. Big breaks for bad banks. Here is what the vulture funds are doing. The vulture fund buys a mortgage of a local family of around €200,000 from a departing bank for approximately €65,000, which is about 33% of the size of the loan. Then the vulture fund raises the interest rate ten times and it links that rate to rises to the ECB rate. However, more than likely, if the fund did borrow, it borrowed at a fraction of high street rates and in reality, although it is not linked to the ECB, it passes on every single rate rise and offers no fixed rate to those struggling families. Tens of thousands of people will not be able to meet the repayments. They will eventually sell and the vulture fund will triple the money, plus interest, or if it restructures, will eventually collect more. Consumer protection authorities say that there is currently a divide-and-conquer strategy by the vulture funds. To the people, there appears to be no regulation. Many will either sell up or be forced to seek local authority help. Anger is rising among these struggling families that the Government is not regulating or assisting with mortgage interest relief. Fianna Fáil, Fine Gael and the Green Party are increasingly out of touch with the many people who are joining the swollen ranks of the working poor and contemplating emigration.

I support this motion. The Government needs to intervene. We need action and a rebalancing in favour of struggling families and away from vulture funds. The Government needs to provide mortgage interest relief to principal residences equivalent to 30% of increased interest costs since June 2022. It needs to increase the banking levy to support households and to develop a clear plan to help those people and to reintegrate those mortgage holders with loans held by vulture funds into the mainstream mortgage market.

Minister for Finance (Deputy Michael McGrath)

I move amendment No. 2:

To delete all the words after "Dáil Éireann" and substitute the following:

"notes that:

- the European Central Bank (ECB) is independent in the formulation of monetary policy for the Eurozone area;

- the ECB's objective is to maintain price stability and wishes to ensure a timely return of inflation to its two per cent medium-term target; and

- since the middle of 2022, the ECB has increased official interest rates on ten occasions by a total of 4.5 percentage points;

recognises that:

- the determination of retail interest rates is a business matter for individual lenders;

- the level of official interest rates is only one of the factors which will influence the level of retail interest rates;

- the changed interest rate environment will not have a uniform impact on all borrowers and that, depending on particular situations such as the terms of individual contracts, some borrowers will experience a higher increase in interest rates as compared with other borrowers; and

- the Government is aware of the challenges some mortgage holders are facing due to rising interest rates;

further notes that:

- the reintroduction of mortgage interest relief, even on a selective or targeted basis, is likely to involve a significant cost;

- the Budget is the best time to decide how to deploy available resources to support households and various groups; and

- in relation to the bank levy, the contribution by each bank within the scope of the bank levy was the same in 2022 as it had been in the previous year and that the extension of the bank levy is under active consideration and further details will be announced in the context of Budget 2024;

recalls that:

- this Government has made substantial fiscal support available to assist with the cost-of-living challenges amounting thus far to some €12 billion;

- €3 billion in cost-of-living measures were introduced prior to Budget 2023;

- Budget 2023 was a 'cost-of-living' Budget, focussed on addressing inflationary pressures; the Budget package amounted to €6.9 billion, which included over €3 billion in direct measures to address the cost-of-living challenges such as adjustments to income tax bands and increases in social welfare payments;

- this was complemented by a set of one-off cost-of-living supports introduced in the final quarter of last year worth over €4 billion; and

- the Government has continued to act in response to the rising cost-of-living; and in February this year, a further package of supports worth €1.3 billion was introduced;

acknowledges that:

- there is a strong consumer protection framework in place for borrowers who may experience repayment difficulty due to rising interest rates or the cost-of-living more generally;

- all Central Bank regulated mortgage entities, both banks and 'non-banks', are required to follow the provisions of the relevant statutory consumer protection codes, including the Consumer Protection Code and the Code of Conduct on Mortgage Arrears;

- in particular, all cases of mortgage repayment difficulty have to be handled positively and sympathetically by a lender or servicer with the objective at all times of assisting the borrower to meet their mortgage obligations and that regulated entities must work with co-operating borrowers to, if possible, put in place a suitable alternative repayment arrangement; and

- there are a number of public initiatives to assist people who are in mortgage or other debt difficulty such as the Abhaile service which is made up of the Insolvency Service of Ireland (ISI), the Legal Aid Board, the Money Advice and Budgeting Service (MABS) and the Citizens Information Board (CIB) which provides free financial advice and, where appropriate, also legal advice to people experiencing difficulty with their mortgage;

furthermore notes that:

- the Government and the Central Bank of Ireland, as independent regulator for financial services providers, have engaged with banks and other regulated mortgage entities to ensure that supports are available to mortgage borrowers;

- on 31st August the Minister for Finance, with attendance from the Central Bank of Ireland, the ISI, the CIB and MABS, met the Banking and Payments Federation Ireland (BPFI) and the Chief Executive Officers and senior representatives of the retail banks, retail credit firms and credit servicing firms to indicate that they need to support their customers at this time;

- following this meeting, on 6th September the BPFI outlined a package of further measures to support borrowers who can and wish to switch mortgage or who are experiencing repayment difficulty; and

- this supports the ongoing work of the Central Bank of Ireland to scrutinise regulated firms; and

therefore:

- supports the Central Bank of Ireland in its regulatory work to ensure that borrowers who should be able and who wish to switch are supported to do so and that those facing repayment difficulty are supported with alternative repayment arrangements where appropriate;

- calls on all mortgage lenders to assess and consider switching applications in a prudent and fair manner, regardless of the borrower's current mortgage provider; and

- calls on all regulated mortgage entities to assist their customers experiencing repayment difficulty and to use all alterative repayment arrangement options at their disposal.".

I thank Deputy Doherty and his colleagues for raising this issue on the floor of the House and affording an opportunity to me and to us all to debate what is undoubtedly a very important issue for many people. As colleagues will know well, the European Central Bank has an independent mandate to maintain price stability. Unfortunately for all of us, inflation is still running too high and the ECB has taken further action to bring it down to its desired target of 2% over the medium term. As colleagues have mentioned a number of times, the ECB has now increased its official interest rates on ten occasions since summer 2022 and its main lending rate is now 4.5%. The scale and pace of recent monetary policy tightening is unprecedented in the history of the euro.

The level of official interest rates does not have a uniform impact on the interest rates charged on retail mortgage and other credit products. People on trackers and variable rate mortgages have seen their rates go up, matching the ECB increases, while a substantial number of people on fixed rates have been sheltered from ECB rate rises, at least so far and until their time on that product expires. The Central Bank has indicated that up to half of all mortgage holders at retail banks are likely to have experienced no increase in repayments by the end of this year and around 40% will be insulated from higher rates by the end of next year. Nevertheless, I and the Government are fully aware that the increase in the level of interest rates, which is unprecedented, allied to the general increase in the cost of living which people are grappling with is causing genuine difficulties for many mortgage holders. It is essential, therefore, that lenders and servicers step forward and assist their customers who are experiencing difficulty as a result.

Since the change in the interest rate cycle, the Central Bank, as independent regulator, has taken action to ensure firms proactively deal with emerging difficulties for their customers. In my own role as Minister for Finance, I asked my Department to establish a long-term mortgage arrears group comprising officials from the Department of Housing, Local Government and Heritage, the Department of Justice, the Department of Social Protection and the Department of Finance. I have also asked the Insolvency Service of Ireland, MABS and the Central Bank to be a part of this group. The objective of the group is to examine the full suite of measures in place to reduce the number of people in long-term mortgage arrears and to recommend changes.

On 31 August, I convened a round-table meeting of the mortgage industry. This was attended by Banking and Payments Federation Ireland, BPFI, and the CEOs and senior representatives of all the main mortgage lenders and servicers, including AIB, Bank of Ireland, Permanent TSB, Pepper, Mars Capital, Avant Money, Dilosk and other mortgage entities. The Central Bank, the Insolvency Service of Ireland, the Citizens Information Board and MABS were also in attendance and they confirmed what we already knew, namely, from the inquiries coming to them, an increasing number of borrowers are encountering difficulty in meeting their mortgage repayments. They also noted cases where borrowers are prioritising their mortgage payments but that financial difficulties are arising in other areas of their lives as a result. On behalf of the Government, I made it clear that banks and all other mortgage entities should be fully aware of the major challenges that some of their customers are facing.

Many mortgage holders have been in direct contact with me, as they have been with members of the Opposition, and with my Department and my colleagues in government, sharing their own personal stories. I know that many are deeply worried about their ability to pay their mortgage now and in the future. I informed the banks and the non-banks of my view that if people are making a genuine effort to pay their mortgage, they should not be allowed to fall into arrears due to the changed interest rate environment. The industry indicated it is closely monitoring the mortgage situation and will actively work with customers to address any repayment difficulties that arise. Inevitably, they have arisen and will continue to arise for some. The industry also noted that the level of long-term mortgage arrears is declining and, based on the most recent data published by the Central Bank last Friday, it is the case that the number of mortgage accounts in long-term mortgage arrears is continuing to fall. At the end of last June, 21,400 primary dwelling mortgage accounts were in long-term arrears, which represents a reduction of almost 1,400 in the first half of the year. As recently as the end of 2021, there were almost 27,000 accounts in long-term arrears. Nevertheless, some borrowers are currently under real pressure and, for this reason, I called on the industry to demonstrate that it is delivering for its borrowers and that it bring forward new measures to provide further supports and certainty for its customers at this time.

Arising from that meeting, on 6 September, BPFI announced a number of further initiatives by the mortgage industry. As part of that announcement, a second phase of the Dealing With Debt campaign was launched to highlight new and existing supports for concerned mortgage customers. The further initiative was announced by BPFI for the closer engagement between MABS and credit servicing firms on a streamlined customer engagement framework to accelerate the agreement of sustainable repayment plans for customers in financial difficulty, which is welcome. The emphasis has to be on sustainable repayment plans.

In relation to switching, all current mortgage lenders - AIB, Bank of Ireland, Permanent TSB, Avant Money, Finance Ireland and ICS Mortgages - have agreed initial eligibility criteria to provide clear guidelines for home mortgage customers of credit servicing firms or other non-lending regulated entities who are seeking to switch their mortgage. In my view, this is a breakthrough and a very welcome development.

Separately, Pepper Ireland also launched a new fixed interest rate alternative repayment arrangement option that may be available to assist its customers in significant mortgage difficulty. When applied, this will see the variable interest rate on a customer's mortgage temporarily discounted and fixed at a reduced interest rate for a period of up to two years. This is a welcome and badly needed initiative from Pepper, and I hope other mortgage entities will add this type of arrangement to their suite of alternative repayment arrangements. Borrowers in difficulty need this type of certainty and I encourage Pepper to provide further clarity on the rate, who will qualify and what the eligibility criteria will be for people facing distress or currently in distress to avail of that two-year fixed rate as an alternative repayment arrangement. As Minister, I will be keeping a close eye on the number of customers who are in a position to access this new arrangement.

All regulated entities, including banks, other regulated mortgage lenders, loan owners and servicers, are required as a matter of law to follow the statutory Central Bank codes of conduct, including the code of conduct on mortgage arrears, CCMA, and the consumer protection code. These codes are not voluntary and there can be no question of the regulated owners not following them. The CCMA, in particular, provides very important protections for co-operating mortgage borrowers who are experiencing repayment difficulty. A borrower does not need to be in arrears to avail of the CCMA provisions and protections, and it is important we all amplify that point for people who are facing real distress, if they are not yet in arrears. The CCMA makes clear that regulated entities, including servicers and loan owners, must treat their borrowers in or facing mortgage arrears with due regard to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits and handled in a sympathetic and positive manner, with the objective at all times of assisting the borrower to meet his or her mortgage obligations.

These are challenging times for many mortgage holders. Any decision on this needs to be taken in the context of the overall suite of measures that will be announced on budget day, when the Government will set out a comprehensive response to the cost-of-living pressures so many people are facing at this time. We have responded quickly to the cost-of-living pressures, with in excess of €12 billion of measures already implemented since the beginning of last year. Measures including income tax reductions, cuts in childcare fees, increased social protection payments, energy credits, free schoolbooks, cuts in school transport fees, and cuts in VAT and excise on energy and fuel bills have all made a real difference to households throughout the country, including people who are paying a mortgage. I can assure the Dáil that the budget, which is in less than three weeks' time, will include further cost-of-living measures.

On the bank levy, I make clear that the contribution by each bank to the levy was the same in 2022 as it had been the year previously. It has not been cut. The Government did take the decision to remove both KBC and Ulster Bank from the scope of the levy to minimise the potential for disruption in the banking market. Any incentive for those two banks to leave the market more quickly than they eventually did would not have been in the interests of customers. I have stated publicly and repeat in the House this evening that the bank levy will be extended beyond the end of the current year, and I will outline further details on budget day in regard to the amount the levy will bring in next year and the reach of the levy.

I have also strongly encouraged all regulated mortgage firms to engage with the Oireachtas finance committee and to outline the various measures they are deploying to assist their customers.

I know the Governor of the Central Bank was before the committee today. I directly called on all of the non-bank entities that have yet to appear before the committee to do so and to give an account of their actions and face questioning in the same way that other lenders are doing. For its part, the Government will continue to meet this challenge and ensure the frameworks are in place to deal with the difficulties in ways that are effective and fair for all. Our response to the real cost-of-living pressures that people are facing around the country will be outlined in less than three weeks' time, on budget day.

Debate adjourned.