Fianna Fáil Spokesperson on Finance Michael McGrath has said today’s announcement by AIB that it is to cut its variable and fixed mortgage rates is a welcome move in the continued battle for fair mortgage rates for customers in Ireland.

Deputy McGrath commented, “I have been making the argument for several years that mortgage holders in Ireland have been paying well above the odds for their mortgage.

“Today’s announcement by AIB of variable and fixed rate cuts will hopefully force other lenders in the Irish market to follow suit. It is heartening to see variable rates move towards 3%, with AIB offering a rate of 2.75% for customers with a low loan to value ratio – the lowest rate I am aware of in the Irish market.

“What today’s announcement shows is that banks can afford to cut rates and still achieve more than healthy profits. The onus now is on Bank of Ireland, Ulster Bank, Permanent TSB and KBC, to introduce further rate cuts if they don’t want to lose market share.

“In my view, banks should be forced to compete on rates rather than ‘cash back’ gimmicks that customers end up paying back several times over in the long run due to higher interest rates.

“There is a significant move in the Irish mortgage market towards fixed mortgage rates. This provides certainty for both the lender and the borrower and I would hope the market will move to provide even better long term fixed rates for customers. Mortgage customers now need to challenge their bank to give them a better rate or else be prepared to switch to another lender if this option is open to them.

“In the coming months, Fianna Fáil’s Bill on mortgage pricing will undergo an independent impact assessment following the Attorney General’s advice to the government.

“Meanwhile, I hope the Oireachtas will proceed with other important provisions in our legislation to assist mortgage holders including the plan to prohibit discrimination by banks between new and existing customers,” concluded McGrath.