A CORK Senator has today raised the plight of fixed rate mortgage holders in the Seanad.
According to Labour Party Senator for Cork South-West, Michael McCarthy, one in three mortgage holders is currently on fixed rate mortgages and so have not experienced the benefits from the recent ECB interest rate cuts like those on variable rates.
Speaking in the Seanad this afternoon, Senator McCarthy said that this anomaly now needs to be addressed by allowing people to change from a fixed mortgage to a variable rate without incurring major penalties.
“Many people who entered into fixed rate agreements did so on the basis of the good mortgage and financial advice available to them. The forecast at the time was that interest rates would rise. As a result, the people to whom I refer are locked into fixed rate mortgages and, as already stated, are paying interest at 5 per cent.
“The penalties for extricating oneself from a fixed rate agreement are massive and do not make it worthwhile to do so. Compliant taxpayers, through the actions of the Government, have recapitalised and bailed out the banks. It would, therefore, be reasonable to expect a small element of quid pro quo from the banks, which should allow people to negotiate their way out of fixed rate mortgage agreements,” he said.
Senator McCarthy has called on the Minister for Finance, Deputy Brian Lenihan, to take the lead on this issue and come before the House to inform it of his intentions in this matter.