Legislation is to be introduced after it was revealed that banks are overcharging consumers on standard variable mortgage rates.

Fianna Fáil Spokesperson on Finance, Michael McGrath, accused banks of "fobbing customers off with minor changes to their rates".

Deputy McGrath said: "Reducing fixed rates is simply not an adequate response for SVR customers as it may not be suitable for large numbers of customers.

"For example Bank of Ireland will not allow existing customers to fix for a period of less than two years, this leaves customers in position where they may not be able to benefit from future rate reductions or lower rates from new market entrants.

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"Mortgage holders who want to sell their home while on a fixed rate mortgage could end up having to pay a penalty for breaking the fixed term early.

"Our legislation is comprehensive and would apply to all entities providing, managing or administering mortgages. This is very important as it would bring in the 46,000 mortgages held by non-bank lenders including those that have been sold to vulture funds.

"The Central Bank would be required to carry out an assessment of the state of the mortgage market taking in to account factors such as the banks' cost of funds, reasonable profit expectation, concentration within the market, the ease with which borrowers can switch mortgages between lenders and extent to which they are switching."

(CD/JP)