Ciarán Lynch (Cork South Central, Labour)
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I understand that. No one is going to buy a house for €200,000 tomorrow morning. People buy houses over a 20 or 30 year period, with an APR, a fixed rate or a tracker rate applying. The net sum of the final payment will be the actual amount a customer pays for his or her house. A mortgage has a running rate over its lifetime, as does the margin. At present, the margin is 3.25%. I understand the bank is obliged to make a profit, but I want to know if a review is required of the current level of profit. When Mr. Boucher appeared before the committee previously, we dealt with the issue of split mortgages and the manner in which Bank of Ireland was dealing with them. At the time it was retaining the interest on the warehouse portion of mortgages to the full extent. Mr. Boucher went away and reviewed the position and the bank then reduced the margin of profit on the split side of mortgages. In this instance Mr. Boucher needs to take the same approach because the margin of 3.25% is very profitable for the bank.