MEPs call for ECB investigation into mortgage rates

Concerns the Irish are paying far beyond the Eurozone average...

MEPs call for ECB investigation into mortgage rates

Michael Probst / AP

All 11 of Ireland's members of European Parliament have lent their signatures to a letter imploring European Central Bank chief Mario Draghi to examine our high variable mortgage rates.

The MEPs have asked the ECB to investigate why the six major players in our banking market are not passing the main ECB refinancing rate on to their customers when it comes to mortgages, but applying it to deposit savings rates.

There has been widespread criticism that we are paying far more than our Eurozone counterparts, with the Consumers' Association's plea to the European Parliament prompting the letter.

The ECB rate now stands at zero. In spite of this, Irish banks continue to charge approximately 4% to some 300,000 people with variable rates.

The problem lies specifically with mortgages - deposit saving products are reflecting the low ECB rates by paying customers far less interest than previously.

According to the letter:

"The average standard variable mortgage rate in Ireland is 3.6%... Some banks still charge over 4% for a standard variable mortgage product. This is despite the fact that the ECB's main refinancing rates for banks is now 0%.

"This demonstrates that Irish banks are overcharging their customers significantly compared to other European banks and are not accurately reflecting the refinancing rate that the ECB has set".

Fine Gael's Brian Hayes, who was one of the names on the letter, told the Irish Independent:

"We need the ECB to look at this issue as Irish banks do not seem to be passing on the current low interest rates which the ECB has set".