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

Issued : Monday 15 June, 2015

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”.