Noonan to meet banks to discuss standard variable mortgage rates

Minister for Finance Michael Noonan will today begin a series of meetings with banks to discuss the issue of standard variable mortgage (SVR) rates.

This follows concern about the relatively high rates being charged variable rate customers here.

Many of the 300,000 people in Ireland with SVR mortgages are paying rates four times those being charged tracker mortgage holders.

Mr Noonan is likely to ask why there has been no significant movement on lowering SVR mortgages, despite a significantly lower cost of wholesale funding.

Despite the threat of sanctions, most of the State’s lenders have made only minor tweaks to rates, with the majority offering to move customers to fixed-rate options instead.

AIB cut its variable mortgage interest rate for both new and existing customers by 0.25 per cent while announcing first half pre-tax profits of some €1.2 billion, a move which brough the bank's standard variable rate down to 3.65 per cent.

Earlier this year, the Central Bank said it had no powers to control mortgage interest rates and did not intend to seek any as it would curtail competition in the market.

Mr Noonan first meetings today will be with AIB and ACC. He is scheduled to meet the heads of six banks over the next two weeks.