THE IRISH Banking Federation has rejected a claim by a Government-appointed watchdog that consumers are being “mercilessly fleeced” by high mortgage interest rates.
Bank customers on both variable and tracker rate mortgages are “getting a good deal”, the umbrella group for the Irish banks claimed yesterday.
It said European Central Bank data showed that variable interest rates were very competitive by European standards. It cited ECB figures which show that average mortgage costs in Ireland are the fifth cheapest in Europe.
A report by the consumer panel of the Financial Regulator had claimed that consumers who did not have tracker mortgages were being treated as “second-class citizens” by being forced to pick up a disproportionate share of bank rescue costs.
It pointed out that many Irish consumers were paying higher rates than before the economic crisis hit, and were not benefiting from current low ECB rates.
The bank federation wrote to the panel yesterday to say that at least half of all mortgages here were trackers, linked to the ECB interest rate, and so were “obviously” providing a good deal.
Fixed-rate mortgages were becoming more popular, it added, and account for one in four new mortgages and one in seven of all mortgages.
According to the Central Bank, 86 per cent of the 791,000 residential mortgages in the country are variable rate, which includes trackers. The rest are fixed rate.