Dáil Éireann Debate, Thursday - 13 November 2008
210 Deputy Brian Hayes asked the Minister for the Environment, Heritage and Local Government the reason the two recent 0.5% decreases in the European Central Bank rate have not been passed on by local authorities to those who purchased properties through shared ownership schemes or other housing schemes which are the responsibility of local housing authorities; and if he will make a statement on the matter. [40431/08]
Amharc ar fhreagraThe interest rate on local authority housing loans is determined by the Housing Finance Agency (HFA) by reference to mortgage rates prevailing in the financial market. The current variable interest rate to local authority borrowers, excluding mortgage protection, is 5.25%. The current fixed interest rate available on local authority loans, excluding mortgage protection, is 5.5% for a period of 5 years.
At the October meeting of the Board of the HFA it was decided that the interest rate cut of 0.5% announced by the European Central Bank in October would be passed on in full to local authority borrowers. The new effective variable rate of 4.75%, which compares favourably with corresponding rates charged by commercial lending agencies, will take effect from 1 December.
Arrangements are being made by the HFA further to adjust rates in line with the second recent rate cut announced last week by the ECB.
