Spokesperson Michael McGrath said over 100,000 residential mortgage holders could save on their monthly repayment by changing mortgage provider.
Deputy McGrath commented said: "Nearly 27,000 could save in excess of €10,000 over the remaining life of the mortgage. This actually understates the true number who could benefit from switching as bank rules exclude anyone who had an arrears balance on the account during the previous 12 months or families with low or negative equity.
"There are potentially huge savings for families but the reality is that only a paltry number of mortgage switching transactions are actually being completed in the market. While there has been a modest pick-up in the level of mortgage switching in recent months, of the total number of mortgages drawn down to date this year just 3.7% were customers changing lender. By contrast in 2005 13% of mortgages transactions were switches.
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"Minister Noonan seems to be relying on competition to deal with the scandal of high variable rates, given his recent hands off approach. These figures are a reminder of the reality that there are very real obstacles in the way of customers who are hoping to make savings on their mortgage. It appears the banks are quite satisfied to maintain the status quo in the Irish mortgage market where product innovation is frowned upon.
"To minimise the potential barriers to mortgage switching there is now a clear case for the Central Bank to introduce a statutory code of conduct on the subject. The Central Bank has a successful code in place for the switching of current accounts from one financial institution to another. The same now needs to be done for mortgage holders who wish to switch their mortgage. A statutory code on mortgage switching would set out in detail the obligations on financial institutions involved in a mortgage switching transaction. A strong code would provide certainty to mortgage holders about the process involved and ensure the mortgage holder's rights are protected."
(CD/LM)
