FG call for full benefit of rate cut
Lending institutions will save €101,000 each day the 0.5% rate cut from the European Central Bank is not passed on to lenders, according to Fine Gael Enterprise spokesman Phil Hogan.
He said borrowers deserve to receive the full benefit of this rate cut rather than have to wait weeks or months for a partial cut.
“In the five years from 1998 to 2002 there were 163,907 loans approved for new houses, with a total loan value of €19.15bn.
"This gives an average mortgage for those new house owners of €116,000. A 0.5% cut in mortgage rates would save each mortgage holder an average of approximately €29 each month.
"With 64% of recent borrowers taking out a variable rate loan that means that 104,900 of the 163,907 new mortgage-holders would receive the benefits of a rate cut. That means that lending institutions are saving more than €3m each month by not passing on the full rate cut immediately – or €101,000 per day.”
The figures are based on the number and value of loans approved for new houses over the past five years, as published by the Department of the Environment’s Housing Statistics Bulletin.
