Tánaiste Leo Varadkar has said that introducing mortgage interest relief to counteract interest rate hikes has not been “ruled out”.
However, the proposal is not currently under consideration, the Dáil heard on Thursday.
The European Central Bank is expected to raise interest rates for the fourth time today.
Sinn Féin’s finance spokesperson Pearse Doherty said that those on tracker mortgages or on fixed rates that are due to expire soon will be worst hit by the increases.
“The banks should absorb these interest rates in the interest of their customers,” he said. “They are uniquely positioned to profit on the backdrop of rising interest rates and they should do the right thing.
“I would ask that you on behalf of government would echo that call.”
Mr Doherty also repeated calls from Sinn Féin to introduce a “targeted, tailored and time bound” mortgage interest relief “for struggling mortgage borrowers who are and will face sharp increases in terms of interest hikes”.
In response, Mr Varadkar said that he accepted that any rise in interest rates will negatively affect Irish customers.
He said that this will hopefully be the last or second last interest rate hike that will be introduced in a bid to slow inflation.
While the hikes will be “unwelcome news”, the Tánaiste said that there are currently no plans in place to introduce mortgage interest relief.
“We don't have any plans at present to reintroduce mortgage interest relief,” Mr Varadkar said.
“It did exist in the past. It existed, generally speaking, at a time when interest rates were much higher than they are now.
“It's not something we would rule out for the future. But there are no current plans to do so.
“It would involve reopening the Budget and all of the consequences that would derive from that.
“When it comes to variable interest rates, it is a commercial decision of the banks and other lenders to set variable rates and they will take into account a number of factors.
“When interest rates go up, the cost of borrowing for banks goes up as well.
“But certainly, my message to the banks is that they shouldn't use rising interest rates as an opportunity to increase profit margins.”
Mr Varadkar said that he accepted that mortgage interest rate hikes will be “very unwelcome for tens if not hundreds of thousands of families across the country”.
He added: “I don't want to raise false expectations. The budget was only agreed recently. “We've only just signed off on the Finance bill and to reopen the question that public finances after only a few weeks, I think would have other consequences that we'd have to consider.”
Mr Doherty told the Dáil that this will be the fourth mortgage increase this year for many mortgage customers, particularly those on tracker mortgage rates.
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