IRISH mortgage lenders are overcharging their customers by £60 million to £80 million per annum according to a study carried out by REA Mortgage Services.

Based on a survey of British, US and Irish mortgage lending practices, REA concludes that the rate of return being achieved by Irish financial institutions is far ahead of the financial risks incurred.

Risk return is calculated, for the purposes of the comparison, on the basis of the difference between the Dublin one month interbank rate and the APR charged by the banks and building societies for home loans.

The study found that the average risk premium paid in Britain is 1.07 per cent. That is almost 50 basis points below the Irish rates. The lowest risk premium in Ireland is 1.11 per cent, compared with 0.83 per cent in Britain.

Using other examples, RBA found that the risk premium in Ireland is 1.56 per cent, 1.06 per cent in Britain and 0.89 per cent in the US.