Dominic Hannigan (Meath East, Labour)
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Question 239: To ask the Minister for Finance the support the State is providing to help mortgage holders move from high rate mortgages with Permanent TSB to lower rate mortgages with other providers; and if he will make a statement on the matter. [28272/12]

Michael Noonan (Limerick City, Fine Gael)
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Ultimately the pricing of financial products, including standard variable mortgage interest rates, is a commercial decision for the management team and board of each lending institution, having due regard to their customers and the impact on profitability, particularly where the cost of funding to each lending institution, including deposit pricing, is under pressure.

Neither the Central Bank nor I have any responsibility for any variation in the variable mortgage interest rates charged by Permanent TSB. However, as I have indicated in replies to previous Parliamentary Questions on this subject, the Central Bank has advised me that it will continue to engage with specific lenders which appear to have standard variable rates set disproportionate to their cost of funds.

The Deputy may be aware that mortgages taken out from 1 January 2004 to 31 December 2012, subject to qualifying mortgage criteria, are eligible for mortgage interest relief until 31 December 2017. The tax relief is available at various rates and is subject to maximum ceilings depending on whether the mortgage holder is a first time buyer or not and depending on the year the mortgage was taken out. The mortgage interest relief is given at source, by the mortgage provider, either in the form of a reduced monthly mortgage payment or a credit to the funding account.

In Budget 2012, I increased the amount of interest relief to 30% for those who took out their first mortgage between 2004 and 2008. This measure fulfils the commitment made in the Programme for Government.