Cllr Sarah O’Reilly (Aontú).

People ‘terrified’ of losing roof over their heads

The Government and its Minister for Finance, Michael McGrath, have been asked to introduce a raft of measures aimed at protecting “vulnerable mortgage holders” against further rises in interest rates.

Aontú’s Sarah O’Reilly said the European Central Bank raised interest rates four times last year, the first hike since 2011, meaning that the cost of borrowing jumped from zero to 2.5 per cent in just six months.

She told the January monthly meeting of Cavan County Council that the almost 200,000 tracker mortgage holders in Ireland had, as a result, seen an “almost immediate increase” in their mortgage repayments.

“When all increases since July are taken into account, the increase is about €220 a month or more than €2,600 a year,” said Cllr O’Reilly.

Add in those on variable mortgages and the number affected jumps to 320,000 claimed the Bailieborough-based representative.

“Behind every mortgage, there are families, families who are already struggling in a cost-of-living crisis along with an energy crisis on top of a housing crisis. I am hearing many truly sad stories and it is heart-breaking to listen to people who are terrified of literally losing the roof over their heads.”

She stated that one in 20 people with a mortgage were living in poverty in 2021.

Citing figures published on Social Justice Ireland, with recent increases in mortgage interest factored in, that figure increased to “more than one in every 13 mortgage holders living in poverty”.

“Currently 47,000 home mortgages are in arrears and, frighteningly, that figure will most certainly increase, along with homelessness and the related negative effects which are inevitable,” added Cllr O’Reilly who asked if anything could be done to help struggling families?

“Yes” is the answer, she said.

“Banks could decide to absorb the increase in interest rates and take a hit on their profits. But it would take a miracle for that to happen. I do think that we here in this chamber have a moral responsibility to lobby the government to intervene and protect the most vulnerable home mortgage holders before a bad situation becomes worse.

“The government must do better, either by forcing the banks to absorb the increases in interest or by legislating to protect family homes. Whatever happens the government will have to support some of these families anyway in the future, so it is better to intervene now.”

Seek help

Cllr O’Reilly’s comments received support from Independent Shane P O’Reilly who encouraged anyone facing financial stress to speak with the Money Advice and Budgeting Service (MABS).

“Seek help,” he urged, before adding: “There’s no such thing as a free lunch.”

He also opined that Minister for Rural and Community Development Heather Humphreys should reintroduce the Mortgage Interest Supplement (MIS), which provided short-term support to help house owners pay their mortgage interest repayments. The scheme closed to new entrants in 2014, and was officially wound down at the end of 2017.

“That’s one potential way the State could help,” Cllr SP O’Reilly suggested.

Small people

There was support too for the motion from Fianna Fáil’s Clifford Kelly and Patricia Walsh, as well as Independent Brendan Fay who stated that the rise in interest rates was “hitting the small people” again.

Sinn Féin’s Paddy McDonald meanwhile commented that he had met with a young couple who, before Christmas, were forced to hand over the keys of their home to the bank due to them being unable to pay.

Fine Gael’s Carmel Brady suggested that lower rates on high BER rated homes was a sign of Green Party policy. Party colleague TP O’Reilly, though supportive of the motion, pointed to where the rise in interest rates was bringing down the cost of inflation.

“So you have to look at things in the round,” he said.