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Minister Kelly welcomes cut to variable mortgage rate for local authority borrowers

Minister Kelly welcomes cut to variable mortgage rate for local authority borrowers
17 Jun 2015

Minister Kelly welcomes cut to variable mortgage rate for local authority borrowers

15/06/15

Minister Kelly welcomes cut to variable mortgage rate for local authority borrowers


Mr. Alan Kelly T.D., Minister for the Environment, Community and Local Government, today (15 June, 2015) welcomed the 0.20% cut to the variable mortgage rate for local authority borrowers.


This latest reduction follows a decision taken by the Board of the Housing Finance Agency (HFA) on Friday (12 June) to decrease its variable mortgage interest rate charged to local authorities by 0.20%. Local authorities have been instructed by the Department of the Environment, Community and Local Government to pass the reduction on directly to their borrowers.


The current variable mortgage interest rate of 2.75% is already around 1.5% lower than standard variable mortgage rate and is the lowest rate available currently in the domestic mortgage market.  This new rate cut will bring the variable mortgage interest rate charged to local authority borrowers down to 2.55% with effect from 1 July.


“I am pleased with the HFA decision to reduce its rate, and that this is being passed on in full to local authority borrowers. The reduction will have real meaning for 13,700 households with a local authority variable mortgage. The saving amounts to €17 per month on a typical mortgage of €100,000”, the Minister said.

 
The Minister also welcomed the HFA’s decision to reduce its non-mortgage variable lending rate by 0.25% with effect from 1 July 2015. 

 
“I also very much welcome the HFA’s decision to reduce its non-mortgage variable lending rate by 0.25% also from 1 July.  This rate cut will benefit local authorities who use these loans to finance local authority social housing schemes. The cut will save local authorities approximately €7.5 million per annum. This HFA move will directly assist in increasing social housing supply and achieving the delivery targets the Government has set out in  Social Housing Strategy 2020”.
ENDS

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Information for editor:


The Housing Finance Agency (HFA) plc. is a non-commercial semi-state company under the aegis of the Minister for the Environment, Community and Local Government, limited by shares under the terms of the Housing Finance Agency Act 1981, as amended. The principal objects of the company are to advance funds to local authorities and approved housing bodies (AHBs) to be used by them for any purpose authorised under the Housing Acts 1966 to 2014 and to borrow or raise funds for these purposes. All of the issued share capital of the HFA is beneficially owned by the Minister for Public Expenditure & Reform.

Local authority mortgages


17,844 local authority mortgages have issued to over 28,000 named borrowers. Such households would invariably accommodate other dependants. Approximately, 13,700 of these local authority mortgages are charged at a variable mortgage interest rate. The remainder of the mortgages have interest rates that are fixed or are set in accordance with a tailored loan scheme specific to local authority housing.
The main house purchase loan currently available from local authorities is the standard annuity mortgage, targeted at lower income first time buyers.  The terms and conditions governing the operation, including eligibility terms, of annuity mortgages are set out in the Housing (Local Authority Loans) Regulations 2012. These are available on the Department’s website at the following link:
http://www.environ.ie/en/Legislation/DevelopmentandHousing/Housing/. Further information is available local authorities directly.

The Department’s website also includes data relating to the number of new local authority loans approved and paid; and value of new loans offered.


It is broken down by year and quarter and by house type (whether new or second hand). It can be found here:


http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,15295,en.xls