Tuesday, 24 September 2019

Questions (79)

Pearse Doherty


79. Deputy Pearse Doherty asked the Minister for Finance if he is satisfied that there is a competitive market for mortgages here; and if he will make a statement on the matter. [26960/19]

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Written answers (Question to Finance)

The financial crash and its immediate aftermath had a significant impact on the Irish mortgage market, with a steep increase in mortgage arrears, a sharp slowdown in the rate of new mortgage lending and the withdrawal of some lenders from the Irish market. While there has been a considerable improvement in the overall economy and mortgage market since then, for example overall arrears have fallen and new lending has increased, it is accepted that the financial crash continues to impact on the mortgage market and that problems still remain. Some of the legacy issues which remain are the current higher level of concentration in the Irish mortgage market compared to that which prevailed before the crash and higher capital requirements of banks for mortgages due in significant part to the high levels of losses incurred by banks on mortgages provided in the years leading up to the financial crash.

Nevertheless, it should be acknowledged that there have been some improvements and increasing competition in the market for the provision of new mortgage credit. Some non-bank lenders have recently entered the market or expanded their product range to include primary dwelling mortgages. The Deputy will also be aware that over the recent past some of the main mortgage providers have reduced interest rates on different mortgage products or introduced new products, particularly in relation to fixed interest rate products, thus demonstrating that they are competing in the market. Also, enhancements have been made to the Central Bank Consumer Protection Code in order to better facilitate the mortgage switching process between lenders and also to require lenders to provide information to their borrowers on their other mortgage products that could provide savings to their customers.