Why mortgage interest relief should be reintroduced

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WizardDr

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There are a few reasons why Mortgage Interest Relief should be reintroduced.

1. The absence of long term fixed rates in Ireland is a catastrophic failure of consumer protection that lies at the door of Department of Finance and the Central Bank of Ireland.

2. But for their absolute, abject and total neglect in not dragging banks into these products.

3. The lack of a strong consumer office that is not tied to Central Bank of Ireland or the European Central Bank might have made a difference.

4. The lack of doing anything about the "planning process" for 30 years that sentenced people to buying houses or housing units at extortionate amounts which but for the planning neglect would have kept prices affordable.

5. The shambles by the Central Bank of Ireland and ECB in the non-performing loans saga that is criminal. [How many more consumer disasters will Central Bank of Ireland get away with?]

6. A bag of cash will otherwise be left for Sinn Fein and they will do it anyway.
 
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You will find they arrived late to the party when the damage could all have been avoided.

That's the point -

The Polish Swiss franc mortgage case will cost more than the Tracker case for your informed information.
 
WizardDr said:
There are a few reasons why Mortgage Interest Relief should be reintroduced.
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When you're ready we're all ears.

1. There are long term mortgage products. The lack of them being wide spread is due to a lack of demand. Giving interest relief is hardly going to encourage people to fix for longer. It will just encourages myopic behaviour.

2. As above.

3. The capping of mortgage loans to 3.5-4 income suggests otherwise. Prevention is better than cure. We've had a decade of sensible lending. That shouldn't require knee-jerk un-targeted policy responses.

4. Err what has mortgage interest to do with any of this?

5. The shambles was made worse by not making people face up to their own responsibilities... Interest relief will only compound this behaviour.

6. Surely leave them to their choices.
 
WizardDr said:
1. The absence of long term fixed rates in Ireland is a catastrophic failure of consumer protection that lies at the door of Department of Finance and the Central Bank of Ireland.

2. But for their absolute, abject and total neglect in not dragging banks into these products.
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I see 5, 7, 10 and even 20 year fixed rates on offer here so points #1 and #2 (which seem to be the same point?) are arguably moot.
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I believe home ownership should be incentivised by the State to reduce future burden - as pensions and health insurance are.

I'm not convinced mortgage interest relief is the best way to do that though.
 
ClubMan said:
PPR CGT exemption is worth far more to most people than mortgage interest relief ever would be.
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Worth far more yes, but does that really incentivise people to buy their own homes? Are they thinking that far down the line re: trade ups?
 
@WizardDr Perhaps you should consider expanding the scope \ title of the thread to be - what can be done to incentivise home ownership. And presumption within the thread is that is accepted as a valid goal.
 
@odyssey06

The problem is where we are at today.

I see the current non-tracker variable rates will rise as Banks pay more deposit interest and the maturity of fixed rates taken out 1,2,3 years ago will roll to much higher rates. The UK is now calling their situation a crisis. I think had we a much stronger consumer protection regime issues like long term fixed rates with much lower rates could have become the norm. Potentially Credit Unions could fill this void. But there is a crisis coming if rates rise much higher that is for sure.

Had we tackled the fixed rates we could have seen the rates that Crerdit Agricole had - 1.95% for thirty years. Those were the rates that were available in parts of Europe whereas our 10 year rates were much higher.

A non-penalty for early break out from fixed rates. One Credit Union already offers a fix for life without penalty to exit.

Radically we should literally shred the current planning process and facilitate the entry to the market which would see a boom in building. The specifications for apartments needs to change - RCSI make out that the cost of an apartment higher than house. These changes would mean that young people would see light at the end of the tunnel and have confidence that they will be able to buy an affordable house. House prices might in fact fall to normal levels buts that a consequence of a well functioning market which we don't have. In the US housing starts rise and fall rapidly. Why is that?

Stream line the buying and selling process - all electronic. We could attract in European banks and this would force the existing incumbents to radically change their offerings.

I think the CGT exemption is too high.

The key is that house prices would normalise if there was easy entry to the market.
 
WizardDr said:
@odyssey06

The problem is where we are at today.

I see the current non-tracker variable rates will rise as Banks pay more deposit interest and the maturity of fixed rates taken out 1,2,3 years ago will roll to much higher rates. The UK is now calling their situation a crisis. I think had we a much stronger consumer protection regime issues like long term fixed rates with much lower rates could have become the norm. Potentially Credit Unions could fill this void. But there is a crisis coming if rates rise much higher that is for sure.

Had we tackled the fixed rates we could have seen the rates that Crerdit Agricole had - 1.95% for thirty years. Those were the rates that were available in parts of Europe whereas our 10 year rates were much higher.

A non-penalty for early break out from fixed rates. One Credit Union already offers a fix for life without penalty to exit.

Radically we should literally shred the current planning process and facilitate the entry to the market which would see a boom in building. The specifications for apartments needs to change - RCSI make out that the cost of an apartment higher than house. These changes would mean that young people would see light at the end of the tunnel and have confidence that they will be able to buy an affordable house. House prices might in fact fall to normal levels buts that a consequence of a well functioning market which we don't have. In the US housing starts rise and fall rapidly. Why is that?

Stream line the buying and selling process - all electronic. We could attract in European banks and this would force the existing incumbents to radically change their offerings.

I think the CGT exemption is too high.

The key is that house prices would normalise if there was easy entry to the market.
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There's a lot in that to digest!

There's a lot of threads already about how to bring down house prices already, perhaps stay focused on measures more directly re: encouraging home ownership v renting.

Interesting point about CGT exemption being too high - how do you see that helping?
 
The key issue is supply and the way to increase supply is radically changing the broken planning process and changing specification on apartments.

This would feed through to availability and affordability,
 
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