Holly Cairns
Question:249. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to ensure that mortgage and loan providers offer loans for homeworkers to retrofit their houses for energy efficiency. [57390/21]
View answerTuesday, 23 November 2021
Questions (249)
Written answers
There are certain requirements which govern the provision of residential mortgage credit to consumers. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders and, under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within this regulatory framework, the decision to grant or refuse an application for residential mortgage credit, irrespective of the precise purpose of the residential mortgage credit, remains a commercial matter for the individual lender. However, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Consumer Protection Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.
It should also be noted that if any person is not satisfied with the way a regulated mortgage provider has dealt with them in relation to an application for a mortgage, the consumer can complain directly to the regulated entity. If they are not satisfied with the response from the regulated entity, the borrower may refer their complaint to the Financial Services and Pensions Ombudsman who, if a valid complaint is made, will independently consider matter.
More generally, the Department the Environment, Climate and Communications is in the process of developing a residential retrofit loan guarantee scheme and, while the specific features of the scheme are still under development, such a scheme should help support lending by banks for retrofit purposes. It should also be noted that some of the main lenders are now offering mortgages at competitive rates for 'green' energy efficient residential mortgages.