Noonan will meet banks to discuss reducing interest
The Finance Minister has revealed plans to call in six of the country's main mortgage lenders to look into cutting interest rates.
Fine Gael's Michael Noonan said the governor of the Central Bank is currently reviewing the cost of mortgages to banks.
"I've had consultations with the governor and he has done a piece of analysis to show the margin between the cost of money and what they're getting for money when they lend it for mortgages, and he has that for me in the next 10 days or so," he said.
The minister is then expected to meet with the main lending institutions to discuss the report.
"I'm calling in the senior management of the six major lenders in the mortgage market and I'll present them with the evidence from the Central Bank," said Mr Noonan.
"I'll say, 'Look, we think you should reduce your interest rates and we want to discuss it. We want you to explain why you can't, but we'd prefer if you did'.
"If you call that pressure, that's pressure, but I'd see it as a discussion. I don't have legal authority to direct."
Meanwhile, Mr Noonan has welcomed the initiative by Ulster Bank to try to get customers in distress to engage.
The bank says it will "look sensitively" at what is reasonable for a customer to repay each month and, if terms are agreed, it will not seek to repossess homes.
If a property is sold and the borrower qualifies for social housing, Ulster Bank will not chase them for the residual debt.
About 2,000 Ulster Bank mortgage arrears customers who have yet to engage with the bank about a possible restructuring of their loan will receive a new communication urging them to talk.
Ulster Bank has sent a one-page note to customers with six "commitments" on how the borrowers will be treated.
These include a commitment that their homes will not be repossessed if revised repayment terms can be agreed, and offers the possibility of residual debt being written-off in the case of voluntary sales.
But it also warns customers who are more than 90 days behind with their payments that they could face legal action to have their homes repossessed if they do not engage with the bank, which is a subsidiary of British lender Royal Bank of Scotland.
Mr Noonan said it was a welcome initiative.
"I thought it was a very interesting initiative," he said. "We're working on adding to the menu of options for the banks in their relationships with people with impaired mortgages.
"Some 110,000 mortgages have been reconstructed using the options there now and they've been satisfactorily reconstructed, but we know that as you come down to the very difficult cases at the end, other options are necessary, and I welcome this initiative from Ulster Bank."