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

The Central Bank figures show the average standard variable rate for a primary dwelling house is 4.2%. Like Deputy McGrath, I welcome AIB's reduction, announced last week. It is the second reduction that AIB has made, and I hope the other banks will follow suit.

As I explained previously, the Central Bank is currently doing analytical work on the main lenders, namely, AIB, Bank of Ireland, Permanent TSB, Ulster Bank, KBC and ACC. It is analysing the margin above the cost of money that the institutions are imposing for variable-rate mortgages. As soon as I get the data from the Central Bank, I intend to engage with each of the banks separately. I will ask them to justify their margin and explain why what they are doing is different from what the Central Bank analysis suggests. We will proceed from there. Ultimately, competition in the marketplace is the best lever to encourage lower interest rates. AIB has started the process and I hope others will follow. There are now some smaller lenders entering the mortgage market, so competition is increasing. I would encourage that.

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