Mortgage interest rate rise of .5% by AIB
Mortgage interest rate rise of .5% by AIB
AIB Bank has raised its mortgage interest rate by .5% for the 2nd time in 3 months, bringing its variable rate to 4%. This .5% increase will add €60.00 per month to the repayment of the average mortgage of €200,000, which will take €1,440 per year from the family budget when both increases are included.
Each interest rate increase affects the country in more ways than increasing arrears or adding pressure to families. These increases will affect about 70,000 customers, removing spending power of €1,440 each or just over €100 million per year from the economy. This affects local shops, jobs and our ability to get out of recession.
Although AIB must return to profit, these increases will push more families into AIB’s arrears department. And with everyone in the country being informed on almost a daily basis that we are 2 months away from another hair shirt budget in December, we cannot cut ourselves out of recession.
The Government needs to get a deal with the EU to lower the country’s debts in order to get the cost of each banks’ borrowings closer to normal levels. This is the one of the best ways to increase the banks margins to profitable levels and avoid these increases which pushes more families in to despair.
If or when this happens, we should not have to remind the banks to reverse these interest rate increases or we will just increase arrears cases and we will continue to see the likes of Ulster Bank hiring 150 more staff, not in Ireland but in Scotland, to assist in dealing with arrears cases.