“As interest rates continue to rise on mortgages and loans the Government has left thousands of borrowers in Louth to the mercy of banks despite promises to help”, according to local Fianna Fáil TD Seamus Kirk.
Deputy Kirk said: “I am meeting people every week in Louth who fear the cost of surviving week-to-week is being put further and further beyond their reach. The latest increases in variable interest rates by AIB and Bank of Ireland will take more money out of people’s pockets in the weeks before Christmas and there is no sign that this Government is prepared to do anything to help. As a result of this rate hike mortgage holders will have to pay an extra €30 a month for every €100,000 borrowed.
“The official mortgage data shows almost 11 per cent of occupied properties are in arrears of 90 days or more. But what are of huge concern to me are the real lives of people in Louth behind those statistics. When you look beyond the headline figures you see that by value, more than one in four (27 per cent) residential mortgages is either in arrears or has been restructured already. On top of that a recent report by Davy stockbrokers said over 50 per cent of residential mortgages is in negative equity, including the majority of those taken out since 2000.
“The real problem with negative equity is that the banks hold all the cards. If the term on a customer’s fixed interest rate is up the bank can increase the rates, knowing the borrower has no choice because they can’t switch mortgage provider.
“Every time the banks increase interest rates they take more money out of people’s pockets, more money out of the economy and actually push those very borrowers closer or into arrears, causing yet more trouble for the banks. The domestic economy is still in a very weak state and retail sales continue to show a year-on-year decline. How can it be in the interest of banks to stop their borrowers from spending in the local economy in Louth, helping a local shop in Dundalk, Drogheda and Ardee which in all likelihood has loans out from those same banks?
Deputy Kirk concluded: “This Government promised to help borrowers in Louth but instead what we see every month is more mortgage holders in difficulty and independent reports showing that banks are not lending to businesses in the way they should – and when they are lending they’re doing so at punitive interest rates. How long is this government going to leave borrowers at the mercy of banks which are showing no mercy at all?”