Fianna Fáil Spokesperson on Finance, Michael McGrath has welcomed Bank of Ireland’s decision to cut its mortgage rates for fixed rate customers by up to 0.35% but has said more needs to be done to bring mortgage rates in Ireland closer to European norms.

Deputy McGrath commented, “I welcome the fact that Bank of Ireland has cut its fixed mortgage rates by up to 0.35%, with the largest reductions for those on low loan to value mortgages. The fact that the bank has been losing market share in the new mortgage market has no doubt influenced its decision.

“The bank continues to charge standard variable rate mortgage customers up to 4.5%, a rate which is dramatically in excess of what can be justified by market conditions. The bank continues to make huge profits from a cohort of customers who have remained on the exorbitant standard variable rate.

“This Bank of Ireland fixed rate cut follows other rate reductions in recent times by KBC, Permanent TSB and Ulster Bank. It is encouraging to see some evidence of competition in the mortgage market resulting in downward pressure on rates.

“Anomalies remain across the system, however, including discrimination against existing customers, customers with falling loan to value ratios not being allowed to benefit from a lower rate with their existing lender, the lack of a Code of Conduct on Mortgage Switching, and some lenders competing on cashback offers rather than interest rates.

“Fianna Fáil has been to the fore in championing the case for Irish mortgage holders to be charged rates more in line with European norms. Our legislation on variable interest rates, which passed second stage last year and has undergone pre-legislative scrutiny, is currently awaiting Committee stage at the Oireachtas Finance Committee as the Minister for Finance seeks further legal advice from the Attorney General.

I would expect the Committee stage to proceed as soon as the Minister for Finance is in a position to fully participate in the legislative process,” concluded McGrath.