# Irish Times Q&A: Why are Irish interest rates among the highest in the EU?



## Brendan Burgess (11 Jan 2019)

*Q&A: Why are Irish interest rates among the highest in the EU?*

* Ireland has average mortgage rate of 3.04% compared to EU average of 1.79% *

_*Why are interest rates here so high?*

The reason we are so much higher than our euro zone peers is down to the fact that enforcing security on a mortgage is both more difficult and less common here than elsewhere. 


Seizing a property, usually as a result of mortgage arrears, remains controversial as we recently saw in the case of a house in Roscommon that was subject to a repossession order. _


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## Brendan Burgess (11 Jan 2019)

_I sent this out to the media this afternoon _

The Central Bank today issued its Retail Interest Rates for November.

[broken link removed]

The average variable rate for new business is about 1.5% higher in Ireland than the average for the rest of the eurozone.

That means that someone with a €200k mortgage is paying about €250 more in interest each and every month.

The vast majority of people pay their mortgage even if they have to struggle to do so. They are paying not only their own mortgage, but they are also paying the mortgage for those who haven't made a mortgage payment in years.

Those politicians and debt campaigners who call for a ban on home repossessions and who threaten to protest outside every eviction should realise that their irresponsible behaviour is imposing an additional cost of about €3,000 a year on responsible borrowers.

Irish mortgage holders in difficulty are the best protected in the World


We have a Code of Conduct on Mortgage Arrears which ties the hands of the banks in what they can do
We have a court system that is very unwilling to grant an order for possession 

We have a Sheriff system that is very unwilling to enforce those orders 

We have a Personal Insolvency System which allows the courts to write down mortgages and set mortgage rates 

We have one year bankruptcy 

And after all that, we have a scandalous Mortgage to Rent Scheme, where the tax payer will pay a market rent to a fund and the council will rent it back to the former owner for an average of €50 a week and the borrower has the option to buy back the house at market value in the future.
Irish mortgage holders should be given the choice

Do you want to pay average eurozone rates if it means that some borrowers who don't pay their mortgages will lose their homes?

Or

Are you ok paying an extra €3,000 a year for those borrowers who can't or won't pay their mortgage



Brendan Burgess


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## Brendan Burgess (12 Jan 2019)

It's very rare for an article in a major newspaper to call it out so clearly and unambiguously 
_
The reason we are so much higher than our euro zone peers is down to the fact that enforcing security on a mortgage is both more difficult and less common here than elsewhere._


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## Bronte (12 Jan 2019)

BB don't forget the mortgage to rent scheme, some if the funding if that is by the state as well. I put it up on the iCare thread. Would love to know how much. Would that be public knowledge. 

My mortgage of less than 2% is up for renewal in August. I hope I'll be able to fix again at such an excellent European rate.


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## Protocol (12 Jan 2019)

Isn't another reason we pay higher interest rates to do with the RWA capital ratios?

I can't recall the exact details, but it was discussed on AAM earlier.


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## RedOnion (12 Jan 2019)

Protocol said:


> Isn't another reason we pay higher interest rates to do with the RWA capital ratios?


Yes, but the RWA is the product of the lack of being able to repossess (at least in part). Much easier to understand the direct connection than talking about regulatory calculations that few people understand.


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## RedOnion (12 Jan 2019)

Bronte said:


> BB don't forget the mortgage to rent scheme, some if the funding if that is by the state as well.


I'm obviously missing something... What's the connection between this and high interest rates?


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