Dáil Éireann Debate, Tuesday - 9 June 2015
324. Deputy Robert Dowds asked the Minister for Finance if he will introduce legislation to compel the banks to reduce the rate of variable mortgages to bring it close to parity with average European variable mortgage rates, in view of the fact that the average European variable mortgage rate is significantly lower than that here; and if he will make a statement on the matter. [21943/15]
View answerAs you know, I met with senior management of Ireland's six main mortgage providers in May. The meetings focused on the mortgage market and specifically the comparatively high standard variable rates currently being charged by the banks.
I outlined my view, that Standard Variable Rates being charged in the Irish market are too high. There was agreement from all lenders that customers should have access to more competitive mortgage products as per my recommendation.
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. Some of the potential products include lower standard variable rates for existing and new customers, competitive fixed rate products and lower variable rates taking account of loan to value for new and existing customers.
In addition to the issue of rates I also outlined the need for greater competition in the market and the need for a more active and well-resourced campaign by the individual banks. This should focus on promoting awareness of their best offering and how easy it is for customers to take up new products and switch between different institutions if they wish to avail of better rates.
The position of home owners who are in negative equity was also discussed and assurances were sought and received that these homeowners will be able to avail of options to reduce their monthly repayments.
Officials in my Department will review progress over the coming weeks and a follow up set of meetings with each of the six banks will take place in September in advance of the Budget.
