Do we really need more mortgage regulation? The kind that gives the Financial Regulator the authority to actually ban certain lending or investment products?

Or would it not just be better to remind the banks what responsible, prudential lending is, and how that was the way they used to function?

Last week the Consumer Consultative Panel of the Financial Regulator took a last pot shot – they are being disbanded and will be replaced with yet another committee of some sort – at the way mortgages have been and continue to be regulated here.

They decried the way the banks lent so recklessly during the property bubble years, especially in giving out 100 per cent, 35 or 40 year loans, interest only loans and sub-prime loans to unsuitable candidates.

They suggest, for example, that interest only loans be banned.

They condemn the way that variable rate borrowers are now being ‘unfairly’ treated by the banks compared to lucky tracker rate borrowers whose loans are effectively fixed at whatever the ECB rate is plus the agreed premium rate, which would typically be in the region of another one per cent.

The tracker rate borrower, is of course in a very privileged position – thank goodness someone is in this sorry tale of a decade of runaway, irresponsible lending.

But not all of the 80 per cent of variable rate borrowers are in difficulty as lending rates rise: many are in the home stretch of mortgage terms that may have been taken out in the mid-1980s or early ‘90s and they are mainly paying off capital with their repayments, and not interest anymore.

Their mortgages may also be relatively small and they are not in negative equity, compared to the more recent boom-time borrower.

Even with rates rising, many variable rate borrowers are still paying interest below four per cent, which in the longer history of Irish interest rates, is well below the historic mean.

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