asked the Minister for Local Government if he will consider granting a subvention to the building societies to enable them to reduce interest rates on mortgage repayments to 10 per cent since the new rate is causing hardship to householders who have borrowed money.
Ceisteanna—Questions. Oral Answers. - Mortgage Interest Rates.
56.
The subvention for building societies which the Government introduced on the 23rd May last has effectively reduced mortgage interest rates for new and existing borrowers from the societies. But for this subvention the societies would be obliged to charge a mortgage interest rate of 12½ per cent on loans. Instead, the interest rate on house purchase loans has been limited to 11¼ per cent. An additional subvention to reduce the rate to 10 per cent is not proposed.
Has the Minister inquired as to what this would cost?
Yes.
How much would it be?
Since 1 per cent in a full year costs approximately £2 million, another 1 per cent would cost another £2 million.
Does the Minister think it fair that building societies can raise interest rates unilaterally——
That is a separate question.
——and create hardship for families who are budgeting?
Deputy Crinion does not even believe the question he is asking. Of course, they were not raised unilaterally. They were told that because of the limited control which the Government have on them that they could only raise it to a certain percentage. It is not correct to say that they have been raised unilaterally and while none of us likes to see high interest rates the Deputy or his party did not have any solution to it and I have not any solution to it except that we gave them a 1 per cent interest increase since 23rd May last which is keeping down the interest rates to 11¼ per cent.
What will the SDA loans be after the national loan?
If Deputy Lemass knows the answer to that perhaps he would tell us. We would like to know.
I know.