Housing Finance Agency

Dáil Éireann Debate, Tuesday - 9 June 2015

Tuesday, 9 June 2015

Ceisteanna (1069)

Paul Murphy

Ceist:

1069. Deputy Paul Murphy asked the Minister for the Environment, Community and Local Government the reason the interest rate charged by the Housing Finance Agency for local authority loans has remained at 2.75% since 2012 while in the same period the Euribor rate, on which the Housing Finance Agency is supposed to determine the interest rate it charges, has fallen dramatically, being less than 0.6% for the past year, and while the tracker mortgage rate charged by commercial lenders is currently 1.5% or less; and if he will make a statement on the matter. [22052/15]

Freagraí scríofa

Minister for the Environment, Community and Local Government

Rates charged to local authority borrowers offer exceptional value by comparison to rates charged by commercial lenders. The current rate of 2.75% is approximately 1.5% lower than standard variable mortgage rate (saving borrowers €1,500 per annum on a €100,000 loan) and is the lowest rate available currently in the domestic mortgage market. The Housing Finance Agency (HFA) provides loan finance to local authorities and voluntary housing bodies for housing and related purposes. The interest rates the Agency must pay are not predicated on base rates afforded by the European Central Bank (ECB) as its funding is sourced through a variety of market sources, including the European Investment Bank. Independently of the ECB rate cuts, the Agency has reduced the rate it charges to local authorities by 0.8% since September 2012.

Question No. 1070 answered with Question No. 1064.