I thank Deputy Troy for raising this matter. It is a very important issue for many constituents of all Deputies. As the Deputy knows, I have taken steps to ensure that the banks provide options for mortgage holders to reduce their monthly repayments. Last May, I requested a report from the Central Bank on the topic which was subsequently published. I also met with the six main mortgage lenders in May and outlined my view that the standard variable rate, SVR, being charged to Irish customers was too high. 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.
In September, I concluded a series of follow-up meetings with these banks and the reality is that the majority have put options in place to allow borrowers reduce their repayments. These options range from lower variable rates to new suites of variable rates based on loan-to-value and reductions in fixed rates.
While I did not meet all mortgage providers operating in Ireland, I met with those which cover the majority of the mortgage market. Furthermore, these meetings should impact on other lenders in the market. I expect that changes to interest rates by the main lenders should drive competition in the mortgage market and exert downward pressure on other lenders to reduce their rates in line with other providers.
I, therefore, encourage borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory.
Central Bank research suggests that 21% of existing private dwelling house, PDH, variable rate mortgage customers could save by switching their provider. Many of those who cannot save by switching are on tracker rates where the interest rate is already low or have SVR rates but with small remaining balances. I would encourage customers to see if there are options available to them to reduce their repayments by switching 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 they currently charge such customers. The Competition and Consumer Protection Commission, CCPC, website www.consumerhelp.ie is a valuable source of information on the rates charged by various financial institutions.
Additional information not given on the floor of the House
The reality is that the majority of mortgage lenders have put options in place to allow borrowers reduce their repayments. Therefore, I do not consider it necessary to take any further action at this time but my Department continues to keep the situation under review.