The Minister for Finance, Michael Noonan has concluded a series of meetings with senior management of Ireland’s six main mortgage lenders.
 
The meetings focused on the mortgage market and specifically the comparatively high standard variable rates currently being charged by the banks. 
 
Minister Noonan stated, "The purpose of these meetings was to discuss the mortgage market in general and specifically to raise the issue of standard variable mortgage rates charged by the six main lenders. 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 meeting with each of the six banks will take place in September in advance of the Budget. The issue of a penal banking levy in the Budget or powers for the Central Banks to regulate interest rates will be considered at that time if sufficient progress is not made."

Source: www.businessworld.ie