Politics

Taoiseach urges banks to take ‘responsible approach’ to any fall in interest rates

Simon Harris says he expects mortgage payments to reduce as quickly as they were raised, but accepts these are commercial decisions for banks themselves

Taoiseach Simon Harris: 'I know that people are still hurting due to the cost of living. Inflation has eased, but it doesn’t mean prices are coming down or it’s any easier to make ends meet.' Photograph: Stephen Collins/Collins Photos

Harry McGee
Wed Jul 3 2024 - 20:56

Taoiseach Simon Harris has held a series of meetings with banks, credit unions and other lenders to discuss mortgage interest rates, urging them to take a “responsible approach” to passing on falling interest rates to customers.

The Taoiseach said he would like to see mortgage interest rates fall as quickly as possible, but conceded that the issue involved a commercial decision for each bank to take.

“I was keen to hold these meetings, given the importance of banking to people’s everyday lives. I know that people are still hurting due to the cost of living. Inflation has eased, but it doesn’t mean prices are coming down or it’s any easier to make ends meet.”

He said he received a relatively upbeat assessment from executives on the economic situation, in addition to “limited evidence” of any increase in the number of households in mortgage arrears because of interest rate increases.

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“As we enter a new phase in the interest rate cycle, I want to see people feel the benefits of reduced monthly repayments as quickly as possible. I believe monthly repayments should fall just as quickly as they rose.

[ ECB cuts interest rates by 0.25 percentage points after two years of hikes ]

“It is, of course, a commercial decision for each bank, reflecting their different funding arrangements, but I emphasised the need for a responsible approach – and it’s something the Government will monitor over the coming months,” he said.

The Taoiseach said the demand in the mortgage market was strong at present, adding the institutions had strongly backed the Government’s plans to build 50,000 homes per year.

On his meetings with credit unions, Mr Harris said: “I’m a big supporter of the role of credit unions, so I was happy to hear their ambitious plans to expand, including growing their mortgage offerings. “While they welcomed recent legislation in this area, I will be following up several matters they raised.”

Harry McGee

Harry McGee

Harry McGee is a Political Correspondent with The Irish Times

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