Kieran O'Donnell (Limerick City, Fine Gael)
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The two year fixed rate for a mortgage with a loan-to-value ratio of greater than 75% is 4.35% in the Republic and 2.09% in the North. Why is the rate charged in the North less than half the rate charged here? Is it the result of the lack of competition in the market in the Republic?

Bank of Ireland and Allied Irish Banks control a large part of the residential mortgage book in Ireland. The former has been ahead of the curve in that it has returned to profitability ahead of AIB, yet it is the latter bank that has seen fit to reduce its variable rate by 0.25%. Why has Bank of Ireland not followed suit and reduced its variable rate? Why is the two year fixed rate for a mortgage with a loan-to-value ratio of greater than 75% charged in the North less than half the rate charged in the South?

I do not wish to go over old ground but I wish to get to the nub of the issue. Bank of Ireland has increased its margin by 43 basis points or approximately 26%.

This more or less corresponds with the reduction in the general cost of funds to the bank itself and Mr. Boucher might elaborate on that. The question simply is about what the bank is not doing. It strikes me as being reasonably logical, in that Bank of Ireland states it is a bank that is in pretty good nick and condition, yet its main competitor in the past week has given a reduction of 0.25% to hard-pressed mortgage holders and to first-time buyers. Moreover, in the North, Bank of Ireland is giving absolutely identical customers a fixed rate for two years that is half the rate it would give to them in Ireland.