Taoiseach Simon Harris will press banks to pass on ECB cuts to homeowners ‘without delay’

Taoiseach Simon Harris is to seek a meeting with the heads of all Irish banks where he plans to insist on rate reductions being passed on “without delay”.

The ECB looks set to finally cut rates later this week amid steadying inflation.

Tracker mortgage holders have suffered 10 rate increases since 2022.

There is an expectation of a cut of 0.25 percentage points in the ECB refinancing rate, which is 4.5pc. Experts predict this will be the first of several reductions this year.

Every cut of 0.25 points will knock €15 off the monthly repayments on a typical tracker. Most of those on trackers still owe around €100,000 and have around 15 years left to pay.

There are around 180,000 homeowners on tracker mortgage rates who would benefit directly from any ECB cuts.

But while tracker mortgage holders will automatically benefit, there is no guarantee that variable mortgages will come down by the same amount.

A government source said Mr Harris will tell bank managers that he hopes they will spread the benefits of ECB moves.

It is understood the ­Taoiseach wants to discuss the extent to which customers on fixed rates can be protected as they roll off their fixed contracts.

He is also expected to engage with competitors to the main banks in the coming months, including credit unions.

The source said many of the banks had reached out to Mr Harris after he took office in April. He now wants to meet with them “to highlight that ongoing cost-of-living pressures are hurting due to increased mortgage payments”.

“This is a priority matter for the Taoiseach, which he wants clarity on as a matter of ­urgency,” the source said.

While political pressure can be applied, the Government has no say over what interest rates banks can charge.

Bank chiefs are likely to point to the fact that many of them have already moved to offer customers a better deal. There have been mortgage rate cuts from AIB, and its subsidiaries Haven and EBS, for those who qualify for a green rate.

And Bank of Ireland has introduced a range of discounts on its fixed rates for those with BER of any kind, not just B3 or better. It also introduced a new flat variable rate rather than a range of variable rates.

PTSB has cut some of its fixed rates.

Credit unions are becoming increasingly important in the mortgage market, with latest results showing around 1,800 mortgages were issued by credit unions in the 12 months to the end of March. They now have a mortgage loan book worth €473m and growing.

In recent weeks, the Government and councils have been criticised for failing to cut the interest rates charged on local authority mortgages.

Traditionally, council mortgages used to have some of the lowest rates.