Davy Stockbrokers have today predicted that pressure on banks to reduce variable mortgage rates is likely to persist.
This comes after reports suggest that the deal on a minority government agreed between the two main Irish political parties, Fine Gael and Fianna Fail, contains a commitment to “take all the necessary action to tackle high variable interest rates”.
While there are no detailed proposals, Davy's believe it is likely that mortgage rates will continue to be a key focus. Fine Gael will now continue its negotiations with independent TDs in order to facilitate the establishment of a minority coalition.
Furthermore, Davy Stockbrokers believe that increasing competition in the switcher market is already exerting pressure as activity picks up. Switching remained modest in 2015 at €285m – out of €4.85bn of new mortgages – but the final quarter showed a pick-up with €126m of re-mortgaging.
Source: www.businessworld.ie
