The Central Bank claims that the average rate for new mortgage business at Irish banks is currently 3.15%. But Brendan Burgess of says the average rate is closer to 4.5%.

Mr Burgess says he has been pursuing the Central Bank on why they are reporting that rate but he says that he can not get a satisfactory response. "They tell us they are using the tracker rate and adding it to the correct rate for new business. Nobody has been able to get a tracker for four years for taking out new money," he states. "They said it was to comply with an ECB definition but I've read the definition and that is not what the ECB wants. They want to show the true rate for new mortgage business across the euro zone. The Central Bank is misleading the ECB and they are misleading the consumer," he says.

Brendan Burgess says that Irish mortgage holders are paying on average about 2% more on new mortgage business than borrowers in other euro zone countries. "That's costing an extra €4,000 per year on a €200,000 mortgage. I don't know why we're being overcharged to such an extent," he says. He points out that mortgage lending is profitable in other European countries where the average rate is 2.65%. "I'm not sure why other European banks won't come over here and lend at those rates and still be profitable. If the banks here are asking variable rate holders to subsidise trackers, that's fine, but be up front about it," he says.

Brendan Burgess says the higher mortgage interest rates here were not being matched by higher deposit rates. "Rates for deposits have fallen dramatically in last year while mortgage rates have gone up. They're paying on average 0.65% on deposits so it's not the explanation for the high mortgage rates," he concludes.

The Central Bank has denied that it was misleading the European Central Bank or the public. 

In a statement, the Central Bank said the statistics were compiled in accordance with ECB regulations and they are subject to audits.

The bank said that all renegotiations, including restructured loans, were included in the aggregate rate for new business.

'New business is defined as any new agreement between the household and the reporting agent, including renegotiations of existing loans,' the Central Bank said.

It said the series was not intended to track national average interest rates, but was designed for the purpose of monetary policy implementation.

MORNING BRIEFS -  Insulation and building materials group Kingspan has announced the acquisition of the US insulation products manufacturer, Pactiv, for $82m. In the year to the end of June, Pactiv generated revenues of $84m and operating profitS of $10m. The deal is a further step in Kingspan's plans to boost its presence in the US.

*** There was a drop in the number of small and medium sized firms experiencing growth in the second quarter, according to figures from the all island business group, InterTrade Ireland. 29% of firms reported growth between April and the end of June, down from 37% in the first three months. However, firms are still in expansion mode. 69% have plans to invest in their business over the next 12 months, especially in marketing and staff training. Eight out of ten SMEs are currently not exporting, a figure that InterTrade would like to see significantly boosted.

*** UDG Healthcare - formerly United Drug - is selling its 50% stake in Unidrug to its joint venture partner, Alliance Boots. The deal is worth €82m in cash. Proceeds will be used to reduce debt and for further investment in other areas of the business.

*** Kennedy Wilson Europe has announced an acquisition in the Scottish market. It is buying the Fairmont Hotel at Saint Andrews for £32.4m sterling. The acquisition is expected to be completed in the next two weeks. The hotel includes 209 rooms, conference facilities, two 18-hole golf courses, a spa and is set on 520 acres of land.

*** The HSE is being called on to be more transparent in its public procurement process. Tenderscout - a company that helps companies win public contracts - says this would be a big step in dissuading companies unhappy with the process from taking the HSE to court. Tenderscout welcomed steps taken by the Government to direct that tender awards be published, but it says more needs to be done to make the system more transparent. The HSE accounts for more than 40% of the tender market here.

*** Europe as a bloc may be performing dismally on the economic front, but its companies are doing quite all right. Continental European companies paid out record dividends to investors in the second quarter - over $150 billion. 
French companies accounted for the biggest increase and it was all down to corporate performance and not just relative weakness in the US dollar.