Michael McGrath (Cork South Central, Fianna Fail)
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256. To ask the Minister for Finance if he will legislate to require banks to give equal treatment to new and existing mortgage customers; and if he will make a statement on the matter. [33165/15]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, as you know I have taken steps to ensure that banks provide real options for borrowers with high mortgage repayments.  

To summarise actions taken to date, I requested a report from the Central Bank on the topic which was published in May. I also met with the six main mortgage lenders and outlined my view that the interest rates being charged to Irish customers were too high. Furthermore, I stressed to the banks that they should treat new and existing customers in a fair manner. 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 SVR customers.

I have recently concluded a further series of meetings with these banks and the reality is that the majority have put options in place to allow borrowers to reduce their monthly repayments. I am pleased to see that the majority of lenders have offered their new reductions and products to both new and existing customers.

I would therefore encourage borrowers to contact their bank to see what is available to them in their particular circumstances or consider moving to another bank if the offer is not satisfactory.

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. Competition rather than legislation represents most sustainable long-term solution to this problem. In this regard, the Competition and Consumer Protection Commission website www.consumerhelp.ieis a valuable source of information on the rates charged by various financial institutions.

Legislation could have significant negative implications for competition and reduce the offerings available to new and switching customers.