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

I remind the Deputy of the steps I have taken to ensure the banks provide options for mortgage holders to reduce their repayments. Last May I met the six main mortgage lenders and outlined my view that the standard variable rate being charged to customers was too high. The banks agreed to review their rates and products and, by the beginning of July, to have simple options in place to reduce monthly mortgage payments for standard variable rate customers. In September I concluded a series of follow-up meetings with the banks, most of which have put options in place to allow borrowers to reduce their repayments. As the Deputy knows, Bank of Ireland is a privately owned company in which the State maintains a minority shareholding. He will also be aware that in my role as Minister for Finance I have no direct function in the relationship between the banks and their customers. I have no statutory function in the commercial decisions made by individual institutions at any particular time, including the setting of product interest rates. Such decisions are taken by the board and management of the relevant institution. A relationship framework has been specified that defines the nature of the relationship between the Minister for Finance and the bank. This was published on 30 March 2012 and can be found on the website of the Department of Finance. It is up to the individual banks to advertise their rates and products. I am sure the Deputy is aware that some banks have focused on fixed rate offerings or rates based on loan-to-value, while others have reduced their variable rates. I asked the banks to provide options which borrowers could use to reduce their monthly repayments. I believe options have been put in place. Bank of Ireland, for example, has chosen to focus on its fixed rate offerings which are available to standard variable rate customers. I understand Bank of Ireland customers can now avail of a fixed rate of 3.6%, which is substantially lower than its current standard variable rate. The bank also offers other options, including a ten-year fixed product which offers borrowers security on their repayments.

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