The Tánaiste Joan Burton says people paying high interest rates on their mortgages will get a deduction.
She also said banks who refuse to pass on lower rates to customers could face a levy or some other sort of sanction.
Ms Burton's comments follow those of Michael Noonan who yesterday raised the prospect of a levy on banks who will not lower their rates.
In the Dáil this lunchtime the Tánaiste assured TDs that the variable interest rates would be lowered.
She said: "The people who are paying those rates will actually receive reductions and if they don't there are other mechanisms, one of which is a levy.
"If the banks continue to turn a deaf ear to the discussion that's ongoing, the banks will have to face other consequences."