Brendan Burgess
Founder
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Press Release 21 July 2016
[broken link removed]
Central Bank introduces additional consumer protection measures
for variable rate mortgage holders
Enhanced measures to increase lenders’ transparency about variable
interest rates
Lenders must explain to borrowers how they set their variable interest
rates
Lenders will have to provide information about other options
The Central Bank of Ireland has announced the introduction of a number of
increased protections for variable rate mortgage holders. The enhanced
measures will require lenders to explain to borrowers how their variable interest
rates have been set, including in the event of an increase. The measures will
also improve the level of information required to be provided to borrowers on
variable rates about other products.
The measures, which are provided for in an Addendum to the Consumer
Protection Code 2012, include the following:
Statement of factors impacting on the rate
• Lenders will be required to produce and publish a summary statement of
their policy for setting each variable interest rate that must include the
factors that impact on the calculation of their variable rate and their criteria
and procedures applicable to the setting of rates. If the lender applies a
different approach to setting the variable interest rate for different cohorts of
borrowers the summary statement must state that and must give the
reasons for the different approach.
• This summary statement will be provided to borrowers when they are offered
a variable rate mortgage and also made available on the lender’s website on
an on-going basis. Lenders will be required to notify affected borrowers of
changes to the statement and make available an updated summary
statement on their website.
1
[broken link removed]
Central Bank introduces additional consumer protection measures
for variable rate mortgage holders
Enhanced measures to increase lenders’ transparency about variable
interest rates
Lenders must explain to borrowers how they set their variable interest
rates
Lenders will have to provide information about other options
The Central Bank of Ireland has announced the introduction of a number of
increased protections for variable rate mortgage holders. The enhanced
measures will require lenders to explain to borrowers how their variable interest
rates have been set, including in the event of an increase. The measures will
also improve the level of information required to be provided to borrowers on
variable rates about other products.
The measures, which are provided for in an Addendum to the Consumer
Protection Code 2012, include the following:
Statement of factors impacting on the rate
• Lenders will be required to produce and publish a summary statement of
their policy for setting each variable interest rate that must include the
factors that impact on the calculation of their variable rate and their criteria
and procedures applicable to the setting of rates. If the lender applies a
different approach to setting the variable interest rate for different cohorts of
borrowers the summary statement must state that and must give the
reasons for the different approach.
• This summary statement will be provided to borrowers when they are offered
a variable rate mortgage and also made available on the lender’s website on
an on-going basis. Lenders will be required to notify affected borrowers of
changes to the statement and make available an updated summary
statement on their website.
1
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