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MORTGAGES RATE STORM; FF demands Central Bank report as row grows.

Byline: PAT FLANAGAN

HOMEOWNERS must be told why the Central Bank wants lenders to continue to hit them with punishing mortgage interest rates, Fianna Fail claimed yesterday.

The call came hours after Tanaiste Joan Burton demanded the banks reduce their variable charges which are among the EU's highest.

The Labour leader said banks who refuse to pass on lower borrowing costs could face sanctions, including levies.

Earlier this week the Central Bank told the Government it does not want the power to force banks to act on the issue.

But Fianna Fail's Finance spokesman Michael McGrath demanded the Central Bank report which claimed that homeowners are not being "gouged" be published in full. He said: "So far, all we have are selected leaks which point to the Central Bank siding with the banks as opposed to the mortgage holders.

"The truth is 300,000 variable rate mortgage holders are paying way over the odds in Ireland.

"The bottom line is a variable rate should move in line with market conditions. Banks are now able to access funds at record low rates from the wholesale markets, the ECB and their deposit base.

"They have failed to pass on that benefit."

Some banks here are charging homeowners interest rates of up to 4.5% on variable rate loans despite these institutions being able to obtain money for as little as 1%.

Pressure is OUTRAGE tough amid a growing mortgage and repossession crisis which could see thousands losing their homes.

Already the Coalition has proposed measures to remove the banks' veto over personal insolvency deals and Ms Burton said lenders who refuse to pass lower rates to customers could face levy or some other sort of sanction. She added: "The people who are paying those rates will actually receive reductions.

"If they don't there are other mechanisms, one of which is a levy.

"If the banks continue to turn a deaf ear to the discussion, they will have to face other consequences."

pat.flanagan@irishmirror.ie McGrath

CAPTION(S):

OUTRAGE Michael McGrath

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Publication:The Mirror (London, England)
Date:May 16, 2015
Words:339
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