BANKS WHO DON’T LOWER MORTGAGE INTEREST RATES COULD FACE LEVY
The finance minister says banks have agreed to start lowering their variable mortgage interest rates from July.
Michael Noonan says banks who don’t lower their rates could face a levy in the next Budget.
Minister Noonan’s announcement says the potential new mortgage products will include lower rates for both existing and new customers.
He also says he’s stressed the need for banks to be more competitive with each other – and he’s warned that he’ll consider punishing banks with a levy in the next Budget if they don’t co-operate to lower rates.
His statement came alongside the release of a report from the Central Bank which reported that the average interest rate on new mortgaes in Ireland is 3.6 per cent compared to 2.5 per cent in selected other European countries.
It says banks must deal fairly with customers in terms of the rates they charge, pointing out that the cuts to ECB rates haven’t been passed onto customers, partly because there’s so little competition in the market.
But it also notes that the banks are only beginning to return to profitability in part because they need higher rates on variable mortgages to make up for their losses on trackers.