Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that it is not the practice of the Minister for Finance to comment in advance on items which may or may not be part of the Budget and Finance Bill.

To summarise the issue to date, I requested a report from the Central Bank on the topic which was published in May. I met with the six main mortgage lenders and outlined my view that the standard variable rate being charged to Irish customers was too high. Subsequent to these meetings, the main banks put initiatives in place to allow borrowers to reduce payments. Such initiatives range from lower variable rates and lower fixed rate products to new suites of variable rates based on loan to values.

I have just this week concluded a further series of meetings with the main banks. The main banks have, in fact, put options in place to allow borrowers to reduce their monthly payments. Borrowers should contact their bank to see what is available to them in their particular circumstances and consider moving to another bank if the offer is not satisfactory.

Competition is the best long term way of reducing interest rates paid by Irish borrowers and ensuring that Irish banks offer a sustainable product range. Higher than warranted mortgage interest rates will encourage new entrants to the Irish market over the longer term. 

In the shorter term, customers can foster competition by considering switching mortgage provider. Central Bank research suggests that 21% of existing PDH variable rate mortgage customers could save by switching their provider. I expect that if financial institutions are convinced that there is a threat that they will lose existing customers, they will reduce the rates that they currently charge such customers. The CCPC website www.consumerhelp.ie is a valuable source of information on the rates charged by various financial institutions.