Dáil Éireann Debate, Tuesday - 21 April 2026
323. Deputy Cian O'Callaghan asked the Tánaiste and Minister for Finance the steps being taken to address the situation where banks are maintaining high mortgage interest rates in order to maintain high profits; and if he will make a statement on the matter. [26779/26]
View answerThe European Central Bank is responsible for monetary policy in the euro area. Having declined in stages since summer 2024, its main lending rate is now 2.15%.
While changes in the level of official interest rates will feed through to the wider economy, it does not have a uniform impact on the level of retail interest rates. In a market economy the determination of retail and business lending rates is a commercial matter for individual creditors.
The most recent Central Bank data shows the weighted average interest rate on new mortgages was 3.51% in February. While this is above the euro area average of 3.41%, it is 28 basis points lower than the same time last year.
Domestic banks currently maintain healthy balance sheets which are important to ensure they are well-positioned in case of adverse shocks. While the profitability of the domestic banking sector is strong, it is noted that it has moderated from recent highs.
The Government, in Budget 2026, maintained the mortgage interest tax credit at the current level for a further year and at a reduced level of relief for the subsequent year. This will assist borrowers who have seen large interest rate increases, to offset the impact of the rising cost of living.
The Central Bank of Ireland, through its regulatory framework, offers protection for consumers and requires that all regulated entities, including banks, retail credit firms and credit servicing firms, are transparent and fair in all their dealings with borrowers.
