Irish Permanent - the country's biggest mortgage lender with an estimated 20 per cent of the market and 95,000 mortgage customers - has become the latest lender to cut its fixed mortgage rates, all the way from one year out to ten years.

Irish Permanent treasurer Mr Michael Torpey said that he expects variable mortgage rates to fall towards the 6 per cent level later this year.

Variable rate mortgages currently range between 7 and 7.5 per cent, and the expected post-EMU cuts in interest rates will mean substantial falls in mortgage repayments.

Mr Torpey said that after that, movements in variable mortgage rates will depend on economic circumstances in Europe as a whole.

"It is against the background of this 6 per cent variable mortgage rate level that the new fixed rate offerings must be assessed," he said.

The longer the fixed term, the bigger the reduction in rates by Irish Permanent.

The fixed rate on a 10-year mortgage has been cut from 8.5 per cent to 7.25 per cent (7.6 per cent APR), while the fixed rate on a five-year mortgage has been cut from 7.25 per cent to 6.6 per cent (7.3 per cent APR)

For shorter terms, Irish Permanent has cut its three-year fixed rate from 7.25 per cent to 6.35 per cent (7.4 per cent APR).

The one-year fixed rate for new customers has been reduced from 6.45 per cent to 5.9 per cent (7.6 per cent APR.)