A shake-up of the home loans market looks likely following the decision in Kilkenny last night by independent insurance brokers to establish a new company that will create a mortgage network "potentially twice the size of IFG".

Diarmuid Kelly, chief executive of the 800-member Professional Insurance Brokers Association said that PIBA Mortgage Services Ltd will open new headquarters in Dublin and will give brokers greater clout in dealing with banks and provide customers with access to a wider range of mortgages.

He said that small brokers would no longer be excluded from dealing with the full range of mortgage providers and that a flat rate of commission for brokers would be centrally negotiated.

At the organisation's annual meeting, newly appointed chairman, Liam Carberry, a broker from Sutton in Dublin also warned the public to "wake up" to the allegedly excessive profits being made by banks on savings deposits, with 2 per cent interest being earned while money is being loaned for up to 9 per cent. Irish households are estimated to have over €60 billion on deposit in banks and Mr Carberry claims they are "getting a very raw deal".

He pointed out that with rising inflation, the value of savings is actually being eroded, but banks had "no incentive to encourage people to invest in equities because they make so much out of deposits".