Local Authority Housing.

Dáil Éireann Debate, Tuesday - 4 July 2006

Tuesday, 4 July 2006

Questions (808, 809)

Sean Fleming

Question:

824 Mr. Fleming asked the Minister for the Environment, Heritage and Local Government his views on the fact that people who buy houses under the affordable housing scheme, sometimes under Part 5 of the Planning Acts, have the option to fix their interest rate during the course of their mortgage when they start with a variable interest rate; his further views on whether it is fair that people who obtain such Exchequer funded loans should be prevented from making such a change compared with people who obtain their loans from the private sector; and if he will make a statement on the matter. [25672/06]

Sean Fleming

Question:

825 Mr. Fleming asked the Minister for the Environment, Heritage and Local Government his views in relation to whether or not people who purchase houses under the shared ownership scheme should have the option to purchase same under a variable interest rate or a fixed interest rate; and if he will take action to deal with this matter. [25673/06]

Written answers

Minister of State at the Department of the Environment, Heritage and Local Government (Mr. N. Ahern)

I propose to take Questions Nos. 824 and 825 together.

Under the terms of the Affordable Housing Scheme, a person may opt for a variable rate of interest or a fixed rate for a period of five years from the date of the loan advance. At the end of the fixed rate period, a borrower may fix for a further five years or change to a variable rate. The terms of the Shared Ownership Scheme provide that the rate of interest is variable for the mortgage term. Borrowers with local authority affordable housing or shared ownership loans have the option of redeeming the loans and refinancing them in the private sector with fixed or variable rate mortgages.

While I am satisfied that the terms available to local authority borrowers are satisfactory and that the rates of interest are favourable in comparison to standard market variable or fixed rates, I will keep the arrangements for both schemes under review in consultation with local authorities and the Housing Finance Agency.