Dáil Éireann díospóireacht -
Tuesday, 9 Feb 1999

Vol. 500 No. 1

Written Answers - Local Authority Loans.

John Perry

Ceist:

228 Mr. Perry asked the Minister for the Environment and Local Government if his attention has been drawn to the fact that the variable interest rates charged by local authorities is 1.5 per cent above the highest rate in other institutions; the plans, if any, he has to reduce the fixed rate of interest in view of the fact that the majority of people on fixed rates with local authorities are unable to re-finance with other institutions; and if he will make a statement on the matter. [3189/99]

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

The interest rate on local authority variable rate housing loans which is determined by the Housing Finance Agency by reference to mortgage rates prevailing in the financial market was recently reviewed by the agency. A reduction of 1.25 per cent to a new variable rate of 5.1 per cent will be effective from 1 March 1999. This is equivalent to the lowest commercial rate currently available.

In view of the considerable costs which would be involved, I have no proposals to reduce the fixed interest rates charged by local authorities. However, where a borrower has difficulty repaying a local authority loan due to unemployment, the interest may, of course, be paid under the supplementary welfare allowance scheme.