The Irish Brokers Association has called on banks to reduce their mortgage rates to promote a fairer and more competitive market for those looking for new mortgages. 

"Lower rates mean more affordable repayments and greater spending power in the rest of the economy," the association's CEO Ciaran Phelan stated. 

He said that if the past has taught us anything, it is that overly extended mortgage holders will have detrimental impact on the economy as a whole and financial institutions have a responsibility to play their part to ensure that this does not happen again.

Recent Central Bank figures showed that new mortgage rates in Ireland are higher than the average in the euro zone.

The IBA said that the lending restrictions of recent years have led to a glut of people who are "just itching" to get on the property ladder and because lending still remains tight many of these are at the mercy of banks - and of their rates. 

"Mortgage lending in Ireland is still well below what would be considered a normal market of between €8 and €10 billion," Mr Phelan stated.

Meanwhile, KBC Bank Ireland has announced a range of decreases to its fixed rate mortgages for new customers who are owner occupiers. 

The new rates came into effect at the bank yesterday.

The decreases range from 0.2% to 0.6% depending on the length and amount of the mortgage.