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

The Government's position is that competition is the best way to achieve a sustainable long-term solution to the issue of high mortgage repayments. The Government made a commitment in the statement of Government priorities for 2014 to 2016 to applying downward pressure on mortgage rates by increasing and supporting competition in the market and it has undertaken a number of initiatives in this regard. As the Deputy knows, I have specifically taken steps to ensure the banks provide options for mortgage holders to reduce their monthly repayments. Last May, I requested a report from the Central Bank on the topic that was subsequently published. I also met representatives of the six main mortgage lenders in May and outlined my view that the standard variable rate being charged to Irish customers was too high. The banks agreed to review their rates and products and, by the beginning of July, to have simple options to reduce monthly mortgage payments for standard variable rate customers. In September, I concluded a series of follow-up meetings with these banks and the reality is that the majority have put options in place to allow many borrowers reduce their repayments. These options range from lower variable rates to new suites of variable rates based on loan-to-value and reductions in fixed rates.

I, therefore, encourage borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory. In this regard, the Competition and Consumer Protection Commission, CCPC, website, www.consumerhelp.ie, is a valuable source of information on the rates charged by various financial institutions. In addition, the CCPC is currently running a mortgage switching campaign and it has a mortgage switching tool on the website, which should allow borrowers compare rates charged across institutions. Furthermore, I am pleased to note that some lenders offer repayment of legal fees or cash incentives to borrowers switching mortgage provider.

I asked lenders to provide simple options to reduce monthly mortgage payments for standard variable rate customers and the reality is that the majority have put options in place. I am pleased to see that the majority of lenders have offered their new reductions and products to both new and existing customers. I am also pleased to see that the banks continue to introduce new initiatives as the competitive dynamics in the market increase. As recently as last week, one bank introduced a 0.5% reduction on managed variable rates for new or switcher mortgages with a loan to value of 80% or less. Another bank reduced its standard variable rate in December.

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