Fianna Fáil has called on more banks to cut mortgage rates for new and existing customers.

The party made the call after KBC Bank announced it was cutting rates for consumers and is now offering a one year fixed rate of 2.9% for customers with a loan to value (LTV) of less than 90%.

A customer with an LTV of less than 50% can now get a rate of 3% with KBC, while a customer in the 80%-90% LTV bracket will now pay 3.5%

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Finance Spokesperson Michael McGrath said: "Today's announcement by KBC Bank represents tangible progress in the campaign for fair mortgage rates. However, the campaign will continue, as will the Oireachtas scrutiny of the Fianna Fáil legislation designed to tackle the issue.

"As banks enjoy favourable market conditions and record low cost of obtaining funds, the benefits must be passed on to mortgage customers, both new and existing.

"It is no longer acceptable that customers of Irish banks pay way over the odds for loan products. We have always argued that rates should follow prevailing market conditions. Fianna Fáil will continue to work for more progress on this issue."

(CD)