Séamus McGrath (Cork South-Central, Fianna Fail)

I thank the Minister of State for being here to take this question. It is critically important that we continue the downward pressure on interest rates in Ireland. I acknowledge significant progress has been made in recent times in reducing mortgage interest rates across this country and bringing them somewhat more in line with EU averages but, unfortunately, we are still above EU averages.

As the Minister of State knows, we are now at a time when the banks are very profitable. The State has divested its interests in AIB recently and, of course, in Bank of Ireland previously.

It is critically important that the focus does not slip in respect of mortgage interest rates. This topic has been raised many times over the years in this Parliament. It has been highlighted repeatedly. Progress has been made, and I acknowledge that. However, we have to continue to shine a light on this to ensure that mortgage rates continue to fall.

As we know, mortgage repayments represent a very sizable part of household expenditure on a monthly basis - the basket of expenditure. It represents a very high proportion of that. Of course, we have seen recently that Ireland is a very expensive country in general compared with other EU member states. We are the second most expensive country in the EU, and that is a significant issue.

Regarding interest rates, it will alleviate the pressure on many households if we as a Government can continue to put pressure on to ensure that mortgage interest rates continue to fall. Figures in April show that the average mortgage interest rate in this country was 3.7%. That has probably fallen since April, and that is very welcome. However, we are still below the EU average. Our interest rates are the fifth highest in Europe. Some countries in the EU are paying less than 2% on average in their mortgage interest rates, which is a significant difference.

There have been new entrants into the market in Ireland, and that is very welcome. Hopefully that has contributed to the downward pressure on interest rates.

It is a critically important area. I want to ensure that the Government continues to pressure. That is the reason I am raising this as a Topical Issue. While progress has been made, it would be very easy for us to take the foot off the pedal on this issue, but that is not what we should do.

While there is momentum on this issue and progress is going in the right direction, we must continue to ensure that we move to be more in line with EU averages. As I said, the banks are now in a very healthy position and back in a very profitable position. As we know, there is talk of executive salaries increasing significantly. While that type of narrative is out there, it is critically important that the end customer sees the best value for money possible in relation to banks. Of course, the mortgage payment is the most essential part of that for most customers across this country. I ask the Minister of State to please keep the focus on this issue. I look forward to his reply.

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