Housing Loans

Dáil Éireann Debate, Tuesday - 17 April 2018

Tuesday, 17 April 2018

Ceisteanna (1577)

Michael McGrath

Ceist:

1577. Deputy Michael McGrath asked the Minister for Housing, Planning and Local Government the penalties which will apply and the formula in this regard for calculating such a penalty, in circumstances in which a person takes out a Rebuilding Ireland home loan fixed rate offer in the event he or she sells his or her property after a period of time or wish to switch his or her loan to a commercial lender; and if he will make a statement on the matter. [15940/18]

Freagraí scríofa

Minister for Housing, Planning and Local Government

The new Rebuilding Ireland Home Loan enables credit-worthy first-time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range. The low rate of fixed interest associated with the Rebuilding Ireland Home Loan provides first time buyers with access to mortgage finance that they may not otherwise have been able to afford at a higher interest rate.

During the period of a fixed-rate mortgage, persons may be liable for a breakage fee if they switch to a variable rate or pay off all or part of their mortgage early. A breakage fee will only apply if, at the time of breakage, the costs of funds to the local authority at the prevailing market rate, result in the local authority incurring a loss in repaying its loans to the Housing Finance Agency.

The details in relation to this, including the formula to be applied in such a case, are on the Rebuilding Ireland homeloan website at http://rebuildingirelandhomeloan.ie/faq/.