New legislation has been introduced to help customers deal with banks charging "rip-off" variable mortgage rates.

Fianna Fáil Finance spokesperson Michael McGrath launched the legislation in the Dáil on Tuesday, 17 May.

Deputy McGrath said: "Under the terms of the legislation, the Central Bank would be required to carry out an assessment of the state of the mortgage market, taking into 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.

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"Should the Central Bank conclude that a market failure exists, the legislation empowers them with a range of tools to influence the standard variable rates charged.

"Fianna Fáil's motivation in bringing forward this bill is ensure fair treatment for customers. We welcome the support consumer advocates, other opposition parties and independent TDs, and the time they have also given to this issue."

Labour Party Deputy Sean Sherlock said: "The Labour Party intends to support the passage of the Fianna Fáil Variable Rate Mortgage Bill to committee stage.

"In the spirit of the new dispensation that exists in Dáil Eireann Labour believes that this Bill, is worthy of further discussion at committee stage.

"The spirit of the Bill is well intentioned in that it seeks to speak for those people who are tied into variable interest rates who bought houses at the top of the market and now find themselves paying over the odds for their mortgages."

(CD/JP)