The plight of homeowners moved centre stage in the General Election campaign as Fine Gael promised aid for those in negative equity.
It is hoping to appeal to the "negative equity generation" on polling day with a pledge to give extra tax relief to those who had bought at the height of the property boom.
Measures include increasing mortgage interest relief to 30 per cent for those who were first-time buyers in 2004-2008 and a new law imposing limits on mortgage rate hikes by banks bailed out by the government.
“We will legislate, if necessary, to stop mortgage lenders charging penalty interest rates (or forcing families to give up their low-cost tracker mortgage rates) on mortgages that have been rescheduled (ie the payment term lengthened) where the borrower has co-operated with the lender in agreeing a new, sustainable repayment plan,” Fine Gael's policy document says.
It reckons its pledges will save struggling home-owners €166 a month.
However, Fianna Fáil has dismissed the pledge as an 'uncosted gimmick'.
Fine Gael is under pressure to show how it will pay for the election promise to the "negative-equity generation", with Fianna Fail leader Micheal Martin challenging the party to "harden up" what it intends to do if in power.
"We have to await the detail of the Fine Gael proposal - we are very careful about engaging in election gimmickry or promises and so on," said Mr Martin.
The Economic and Social Research Institute estimates there are 300,000 home owners in negative equity after property prices dropped 45% since the peak in 2006.
There are another 33,000 in mortgage arrears with tens of thousands more in danger of arrears entering short-term arrangements with their banks and mortgage companies, according to estimates.
Fine Gael's finance spokesman Michael Noonan said the full cost would be accounted for in Fine Gael's economic plan this week - and part of it would come from abolishing mortgage interest relief for first-time buyers from June.
"People who are buying houses now are getting them at rock-bottom prices. They don't need assistance," he said.
Mr Noonan said Fine Gael would abolish relief for those buying houses from mid 2011 on, because given the reduction in house prices, people did not need a tax incentive to buy their first home.
