Fianna Fáil Spokesperson on Finance Michael McGrath has described Ulster Bank’s decision to slash its 2 year fixed mortgage interest rate to a market best of 2.3% as “a major breakthrough for consumers and providing a long awaited shake up for the Irish mortgage market”.

Deputy McGrath commented, “Ulster Bank have announced that they are lowering their 2 year fixed rate mortgage interest rate to 2.3% for all loan to value levels. This is by far the lowest rate charged on the market and it is available to new and existing customers.

“This is a hugely significant move by the bank and it is hard to see how other banks in the market cannot afford to respond. It proves the point that Fianna Fáil has been consistently making – banks in Ireland have been ripping off mortgage holders and can afford to cut rates closer to European norms and still make healthy profits.

“I would urge now other players in the market to follow suit and reduce their interest rates. For far too long, customers have been fleeced with high interest rates. Even with this move, interest rates charged on mortgages in Ireland are the highest in the Eurozone. According to the latest figures from the Central Bank the average interest rate across the euro area stands at 1.8% with Ireland being the highest at 3.15%.

“We continue to have major problems in Ireland’s mortgage market. For example, the level of non-compliance with the Consumer Protection Code in relation to cash back promotions is really quite startling. These cash back incentives are designed to dazzle consumers and it is very difficult for them to assess where the best long term value is, especially if they have not been given adequate and accurate information. Fianna Fáil believes that the Central Bank should clamp down on these cash back offers.

“Today’s move is great news for consumers. Mortgage holders should not tolerate paying more than they need to. If consumers are prepared to shop around for the best deal and switch their mortgage, banks will have no option but cut rates. I and my colleagues will continue to work towards cheaper interest rates for all Irish consumers,” concluded McGrath.