Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

No, I have had no personal lobbying from the banks. I know from contacts with the Department that the banks are concerned about this legislation. That is to be expected. To my knowledge, they have not gone into the specifics of their concerns. Some of those concerns came through in my Second Stage speech.

I put it to Senator Conway-Walsh that it is not true to say that the actions taken by me and my Department have not had results. They have had very strong results in some banks, such as AIB. Deputy McGrath quoted the rates, which are not much more than 3%. I think one can now get a mortgage from AIB for something like 3.25% or 3.3%. The rates here are getting into a space where they can compare with what is happening in some European countries. They are certainly at the bottom.

AIB is not the only bank that is doing this. Other banks have various offers. PTSB is moving to a loan-to-value system whereby a customer pays a higher rate on a 90% mortgage than on a 50% mortgage. If I have headroom because of the equity in my house beyond the level of my mortgage, I am a lower risk. The banks are pricing for risk. This suits some people but not others.

It is not true to say there has been no movement. There are outliers that have moved on new lending to new mortgage holders but have not moved on their historic or legacy mortgages. That is the difficulty. This is now a new issue. The programme for Government provides that the Central Bank and the Competition and Consumer Protection Commission, having due regard to their respective remits, will work "to set out the options for the Government in terms of market structure, legislation and regulation to lower the cost of secured mortgage lending".

Perhaps the committee should add the Competition and Consumer Protection Commission to its list of invitees. As the authority with responsibility for competition, it might have a particular perspective on many of these issues, which relate to competition. In general terms, I am simply giving my position on the matter. I do not disagree with the fundamental principle of what the Senator is saying, which is that variable interest rates seem to be too high in the cases of certain mortgages and we should continue to bring those rates down.