The Finance Minister says he is calling in the six main banks to ask them to explain why they are not reducing their variable rate mortgages.

Michael Noonan says the Central Bank Govenor has analysed the difference between what the banks are borrowing the money for themselves and what they in turn are charging their customers.

Minister Noonan says although he doesn't have legal authority to tell the banks to cut the rates, he intends to apply pressure:

Last week the chief executive of AIB said the bank will look at reducing its variable interest rate for mortgage customers in June.

David Duffy says if the costs at the bank come down, it is possible that mortgage holders will see a further cut.

Permanent TSB warned that its timetable for a return to profitability could be put at risk by mounting political, regulatory or competitive pressure to reduce the current 4.5% variable mortgage rate it charges customers.

AIB, EBS and Haven introduced a 0.25% cut to their variable rates in December.