Claims Longford mortgage holders and SMEs being ‘fleeced’ by high interest rates

Liam Cosgrove

Reporter:

Liam Cosgrove

Email:

liam.cosgrove@longfordleader.ie

Mortgage rates

Concerns have been raised about the high cost of mortgage rates

Mortgage holders and small businesses are being "fleeced" by inflated charges, it has been claimed.

Brokers Ireland chiefs hit out new figures which showed that interest rates on home loans here are the third highest in the currency zone.

Diarmuid Kelly, Chief Executive at the organisation, which represents 1,225 Broker firms, said: “We’ve been told by lenders that Ireland is different for a host of reasons, including having to hold bigger capital reserves, and this is the rationale as to why Irish lenders could not match the type of euro area rates that are more the norm.

“However, that is about to be tested with  the entry of competition from Avant Money already showing pressure for movement.

“The fact is, up to now, competition has been lacking in the Irish market.

“If the mortgage situation is bad the treatment of the SME sector is far worse, with Irish SMEs borrowing amounts up to €250k having to pay an excess of  over 3pc on their counterparts in the euro area,” he said.

In today’s Central Bank figures Irish SMEs are paying 4.95pc on new loans with SMEs in the euro area in general paying a substantially lower 1.91pc.

On today’s mortgage interest rate data Mr Kelly noted that Irish mortgage holders are paying a full 1.47pc more than their euro area counterparts.