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

The purpose of the meetings was to ensure that persons with mortgages would get mortgages at cheaper rates. Whether they are variable-rate or fixed mortgages is a matter of choice with customers. A reduction in mortgage rates was the priority of those meetings. While AIB had announced a variable mortgage rate reduction before this series of meetings, I had previously met the incoming CEO of AIB at the end of the process of his appointment and discussed variable mortgage rates with him. At that stage, I got a commitment from him that he would make an announcement that variable mortgage rates would be reduced.

The other banks have responded in various ways. There is obviously an advantage for banks to move to fixed-rate mortgages, which are essentially lower rates than variable-rate mortgages. If the banks have fixed rates over time, they can fund against the fixed rate arrangement at a lower rate than they would fund for variable rates on the market. They have until 1 July and we will see at that stage. The Deputy should remember there is a series of follow-up meetings before the budget in September.

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