This week, the Irish Government announced that some mortgage interest relief would be made available to mortgage holders. It was, in the overall scale of budgetary measures a relatively modest gesture.
While it can be fashionable for some observers to analyse the merits of the measure in isolation, in an overall personal finance context, the measure makes perfect sense.
One commentator in a major publication today used the words ‘pigs back’ when describing the financial benefits reaped by tracker mortgage holders over the course of the last decade. It’s as if those mortgage holders were freeloaders, getting something for nothing at the expense of others.
In another article, existing mortgage holders are loosely described as ‘rich’. As if! Many are living through years of excessive household costs where mortgage repayments clash endlessly with myriad other costs.
Isolated stats don’t make for complete facts.
In an ongoing financial resilience survey conducted by MoneyWhizz, many people in their 40’s are struggling to balance paying for essentials, including saving sufficiently for their retirement.
The fact this Government is offering a once-off tax-relief measure to mortgage holders that have experienced the most dramatic rise in interest rates in a generation is simply an acknowledgement of the reality on the ground. Not even the best prepared mortgage holder could reasonably have been expected to absorb the mind-blowing rise in monthly mortgage repayments. And when combined with the sky-high increases in household essentials, including gas, electricity and food, the portrayal of tracker mortgage holders as unworthy and wealthy misses the mark by a country mile.
Every week, I deal with real people. Families. Parents. People that work for a living. People that pay income tax, PRSI and USC. They pay property taxes and much more! As part of the working majority, they have received some pay increases, in line with ‘normal’ inflation but way short of the rate of inflation the world has experienced over the last 24 months. And they wait! They wait for inflation to come back to ‘normal’. They wait patiently as the ECB and its monetary experts promise month-on-month that things will be ‘normal’ again soon. Which they will no doubt eventually be. But that ‘normal’ is not now. It is not today. It is not as they read with horror that interest rates could rise again. Or that the cost of running a household is still climbing, even if the economic ‘experts’ gleefully point out that the ‘rate’ of prices rises is ‘falling’. These are merely a cynical play on words. Inflation is still here. It is still rising. It is still ravaging household finances and people’s spending power!
So, this Government made absolutely the right call on mortgage interest relief. If nothing else, it says that it is listening to its people and aware of the mighty forces that threaten their financial resilience. Tracker mortgage holders have especially been caught in a vicious and unforgiving financial storm. Nowhere did anybody ever predict that inflation and interest rates would explode as they have. This is not about what ‘could’ or ‘should’ have been, this is about the reality on the ground, today, now!
Mortgage holders, especially those on tracker rates are being pulverised much more so than those on fixed rate terms (where their repayments have been fixed) and Standard Variable Rates (where some rate rises were not fully passed on). If nothing else, the temporary measure announced by this Government gives breathing space. It is not a handout; it is relief on income tax that they pay!
This Government simply acknowledged that it is listening to its citizens. That it wants to help mortgage holders most impacted get safely to a point in time when inflation really does ease and household budgets stop being squeezed…and their incomes finally catch up!
So, for those that attack the measure of support that this Government has offered to mortgage holders, including those on tracker rates, they are using single, convenient points of fact but completely missing the human story. This is a lifeline, not a lifestyle gesture!