Banks Refusing To Reduce Variable Mortgage Rates 'Unjustifiable' - FF

Banks refusing to reduce their variable mortgage rates has been described as "completely unjustifiable", by Fianna Fáil.

The party made the announcement after it was revealed AIB managed to increase its net interest margin despite reducing its standard variable rate on four occasions in the past eighteen months.

Spokesperson for Finance Michael McGrath welcomed the trading update from AIB, however he said where resolutions have been put in place, they need to be carefully monitored to ensure they are genuinely long term and sustainable.


Deputy McGrath commented: "The positive update from AIB further boosts the possibility of a further variable rate cut in the coming months. It would be a hugely positive development if the other main players in the domestic mortgage market were to follow AIB’s lead in this regard.

"I've always acknowledged the needs for banks to be profitable and it is a key objective for the State to recoup the enormous amount of funds used to rescue AIB. It's possible to match this objective with the charging of competitive mortgage rates which move in line with the bank's cost of funds.

"I also welcome the improvement in the mortgage arrears situation at AIB. Where resolutions have been put in place, they need to be carefully monitored to ensure they are genuinely long term and sustainable. The prospect of a further repayment by AIB to the State of €1.8 billion in capital in July of this year is also a positive sign."

(CD)