Banks are to be forced to inform standard variable mortgage customers about alternative home loans so consumers can avail of lower interest rates. 

The new rules, which are being introduced by the Central Bank, will come into force in February next year.

It means banks must inform customers if they are on a higher interest rate than other products on offer by the same bank.

Banks must also refer customers to the relevant section of the website of the Competition and Consumer Protection Commission, which will show the rates offered by other lenders. 

Director of Consumer Protection with the Central Bank Bernard Sheridan said very few mortgage customers were switching banks.

He said the Central Bank was working on measures to make it easier for customers to switch lenders.

Mr Sheridan added: “The measures we are introducing today will require lenders to be more transparent with borrowers about how they set their variable interest rates, including in the event of an increase.

"These measures will also improve the level of information required to be provided to borrowers on variable rates about other products, so they can consider their options.”

Banks will also be required to produce a summary statement of their policy for setting variable rates.

If lenders are offering lower rates to one group of customers, the banks will have to explain why they are doing so.

Where there is an increase in an interest rate, lenders will be required to give a reason for the rise.