Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I agree this is a serious matter for a great number of people. That is why the Government made the recent changes. I do not agree that the Minister’s initiative has been a failure. Today is the first day he set for consideration by the banks. The Minister already notified the Central Bank that if it required legislation to intervene, he would do so to give it the authority. It did not seek that authority. He held a series of meetings with the six banks. They focused on the comparatively high standard variable rates currently being applied by the banks, as in the case to which Deputy Martin referred of a €200,000 loan over 20 years at 4.5%. The banks agreed to review their rates and their products and to have simple options to reduce monthly payments for standard variable rate customers. Some of the potential products include lower standard variable rates for existing and new customers, competitive fixed-rate products, and lower variable rates taking account of loan to value for new and existing customers.

Officials in the Department of Finance have been mandated to review progress in the coming weeks and to set up a number of follow-up meetings between the Minister and the banks in order that they follow through on what they said. Some institutions have announced reduced standard variable rates, which is welcome, while others have offered customers reduced fixed-rate options as a method of reducing monthly repayments. That is the customer’s choice. In recent weeks we have also seen increased competition in the switcher market, which I welcome. That was not available previously. Institutions are offering customers reduced rates and incentives to attract them, which is welcome. The increased range of products already announced by the banks have increased competition in the marketplace, which is also welcome. The Government has always been of the view that an increased level of competition is in the customer’s interest. Officials are following up on what the banks said they would do. I expect there will be further meetings arising from that, and I do not accept that the initiative taken by the Minister, Deputy Noonan, has been a failure. I view it as a work in progress.

We have debated the legislation to which Deputy Martin referred and I do not see it as being pertinent just now. I have outlined the progress made by the Government. We have seen progress on the part of AIB, Bank of Ireland and KBC, all announcing new products for existing customers that will see mortgage rates reduced to less than 4% for customers, which is in the interests of customers.

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