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Mortgage Interest Rates

Dáil Éireann Debate, Tuesday - 12 February 2019

Tuesday, 12 February 2019

Questions (157)

Pearse Doherty

Question:

157. Deputy Pearse Doherty asked the Minister for Finance the rights a consumer has to seek a lower interest rate on a mortgage as the consumer's loan-to-value ratio decreases; the obligations on lenders to inform borrowers of these options; and if he will make a statement on the matter. [6446/19]

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Written answers

The Central Bank of Ireland has made further changes to the Consumer Protection Code 2012 (the Code), effective from 1 January 2019, to help consumers make savings on their mortgage repayments, to provide additional protections to consumers who are eligible to switch, and to facilitate mortgage switching through enhancing the transparency of the mortgage framework.

For consumers on variable rate mortgages (other than on a tracker rate), provision 6.5(g) of the Code now requires lenders at least annually to, inter alia, notify consumers as to whether they can move to a cheaper interest rate as a result of a move in their Loan-to-Value interest rate band (subject to the provision of an up-to-date valuation and any other requirements that may apply) and, if the consumer is permitted to move between Loan-to-Value interest rate bands, to invite the consumer to contact the lender to discuss the matter further.

If the consumer is not permitted to move between Loan-to-Value bands, the consumer is nevertheless to be notified that he/she may be able to avail of lower Loan-to-Value interest rate bands from another lender based on an up-to-date valuation.

More generally the Code also requires lenders at least annually to provide variable rate mortgage holders (excluding tracker mortgage borrowers) a summary of other mortgage products offered by the lender that could provide savings for the consumer at that point in time, a statement that consumers should keep their mortgage arrangements under review as there may be other options that could provide savings for the borrower and to provide a link to the relevant section of the Competition and Consumer Protection Commission website (https://www.ccpc.ie/consumers/financial-comparisons/mortgage-comparisons/) relating to switching lenders or changing mortgage type.

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