Scope for banks to cut mortgages ‘diminishing’

Lenders have probably the room to cut mortgage costs by up to a quarter of a percentage point over the next three months but their scope for major cuts later next year is probably diminishing, a senior analyst has said.

Owen Callan, analyst at Investec Ireland, said that political pressure could likely build on Bank of Ireland, and to a lesser extent on Permanent TSB – PTSB, to review their standard variable rates because those banks have focused on promoting their reductions in fixed-rate home loans.

His comments come after KBC Bank confirmed yesterday it had lowered most of its variable and fixed-home loan rates, reducing its 80% to 90% loan-to-value variable rate mortgage by 0.15% to a rate of 3.5%.