Minister for Finance Michael Noonan has been briefed by Central Bank governor Patrick Honohan about research into why mortgage rates have not been cut by the commercial banks.

Mr Noonan and Mr Honohan yesterday discussed why standard variable mortgage rates in Ireland have not been cut in line with interest rate reductions by the European Central Bank.

In a statement after their meeting, the Department of Finance said Mr Honohan had provided an update on the work that he and his officials were carrying out on the rates being charged by the banks.

“The governor and the Minister noted that the standard variable rates charged in Ireland are higher than other euro area countries and have not fallen in line with ECB wholesale rates.

“The Central Bank will continue to research why this is the case and will publish results shortly,” the statement added. “The governor will update the Minister on progress in due course.”

A spokesman for the department said if the research showed there was an issue, it would be presented to the banks and pressure applied for a reduction in rates. The research is expected to be concluded before the summer.

Mr Noonan told the Dáil on Wednesday that while the Central Bank did not have the power to fix mortgage rates, it could engage with specific lenders that appeared to have set standard variable rates disproportionate to the cost of funds.

“I will ask him [the governor] to consider what influence the Central Bank can bring to bear to bring variable mortgage rates closer to the cost of funds,” said Mr Noonan.