Seán Haughey (Dublin Bay North, Fianna Fail)
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424. To ask the Minister for Finance his views on the rise in interest rates in recent months; if he is aware of the concerns of savers who are disappointed that the interest rate given on deposit accounts is not increasing in line with interest rates rises on mortgage accounts; if he will raise this issue with the Central Bank; and if he will make a statement on the matter. [18199/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The formulation and implementation of monetary policy is an independent matter for the European Central Bank (ECB). As the Deputy is aware, the ECB has increased official interest rates over recent months as it attempts to combat inflation.  The level of official interest rates will influence the overall level of interest rates throughout the economy. 

However, the determination and adjustment of retail and business lending rates and deposit rates are commercial decisions for individual lenders in line with the terms of the particular credit or savings contract and neither the Central Bank nor I have any function or role in such decision making matters by financial institutions.

Nevertheless, it is worth noting that the weighted average interest rate on new Irish mortgage agreements charged by credit institutions in Ireland at end-February 2023 was 2.92 per cent (compared to 2.76% in February 2022).  The comparable average interest rate for new mortgages in the euro zone was 3.33% in February 2023, up from 1.36% in February 2022.  The rate on new Irish mortgage agreements has now been less than the euro area average since October 2022 and is now the third lowest in the euro area.

In relation to savings rates, the Central Bank has advised that interest rates on household overnight deposits stood at 0.03 per cent in February 2023. Interest rates on new household deposits with agreed maturity rose to 1.02 per cent in February in Ireland. The equivalent rate in the euro area was 1.92 per cent. Interest rates on outstanding deposits’ rates with agreed maturity was 0.35 percent in February 2023, an annual increase of 25 basis points since February 2022.

Aodhán Ó Ríordáin (Dublin Bay North, Labour)
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425. To ask the Minister for Finance if the Central Bank can direct a financial institution (details supplied) to increase interest rates on savings in line with increase rate increases on tracker mortgages. [18265/23]

Aodhán Ó Ríordáin (Dublin Bay North, Labour)
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426. To ask the Minister for Finance what, if any action he is considering to require financial institutions to increase interest rates paid on savings in line with the increases in mortgage interest rate increases associated with tracker mortgages; and if he will make a statement on the matter. [18266/23]

Aodhán Ó Ríordáin (Dublin Bay North, Labour)
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427. To ask the Minister for Finance the minimum notice period required to increase an interest rate on a tracker mortgage; and if it is correct protocol that a mortgage lender (details supplied) would give nine working days' notice of an interest rate increase in the same month. [18267/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 425, 426 and 427 together.

The formulation and implementation of monetary policy is an independent matter for the European Central Bank (ECB). As the Deputy is aware, the ECB has increased official interest rates over recent months as it attempts to combat inflation.  The level of official interest rates will influence the overall level of interest rates throughout the economy. 

However, the determination and adjustment of retail and business lending rates and deposit rates are commercial decisions for individual lenders in line with the terms of the particular credit or savings contract and I have no function or role in such decision making matters by financial institutions.

Firms make their own commercial decisions based on many factors, including the costs of offering the loan or deposit products, the terms and conditions of their products and their commercial pricing strategy and funding costs. These are commercial decisions for individual banks and neither the Central Bank nor I have a role in prescribing or setting these interest rates.

The changes in the interest rate on a tracker mortgage are determined by any movement in the underlying rate being tracked (typically the interest rate set by the European Central Bank) and, in line with the terms and conditions of the mortgage contract, these changes are applied to tracker mortgages customers by their lenders. This approach applies to all tracker mortgage customers including those that have remained with the original lender and to borrowers whose tracker mortgages were purchased by another entity.

A regulated entity must notify affected personal consumers on paper or on another durable medium of any change in the interest rate on a loan.

In the case of a tracker interest rate, the regulated entity must provide the notification required as soon as possible, and no later than 10 business days after the regulated entity becomes aware of a change in the underlying rate being tracked.