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Banks controlled by British taxpayers are offering mortgages to first-time buyers in the Irish Republic at half the rate that they are available in the UK. Halifax, part of the Lloyds Banking Group, is charging 2.74 per cent for a two-year fixed-rate deal to first-time buyers in Dublin. A five-year fixed-rate deal would cost borrowers in its home town of Edinburgh 6.14 per cent.Royal Bank of Scotland (RBS) is charging 2.95 per cent for a new mortgage in Ireland; in the UK, it charges 5.99 per cent for a similar product. Matthew Elliott, chief executive of TaxPayers' Alliance, a lobby group, said: “It seems bizarre and unfair that Halifax and RBS, which have in effect been propped up by British taxpayers, are offering worse deals to British customers than those elsewhere.” British taxpayers have spent more than £60 billion bailing out RBS and Lloyds Banking Group, leaving the Government with a controlling stake in each. David Hollingworth, of London & Country Mortgages, a British broker, said: “The margin appears to be drastically different. First-time buyers in the UK are crying out for a more competitive market with lower rates at a higher loan-to-value, which Irish borrowers are benefiting from.” Halifax and RBS said that the rates should be seen in the context of the British and Irish markets. The Irish market was more competitive, they said, and that forced them to accept lower margins on their mortgages. Ray Boulger, of John Charcol, the broker, said: “It seems strange that UK borrowers are being charged so much more than their Irish counterparts when the economic conditions in both countries are similar.” A spokeswoman for the British unit of Halifax said: “We price all products in line with the market, ensuring the bank continues to write a prudent and proportionate level of new business.” Michelle Slade, of Moneyfacts.co.uk, the financial website, said that in the UK lenders were taking a bigger margin for risk because the probability for default had risen as factors such as unemployment took hold. “The lenders are being extremely cautious, but if the predicted increased defaults don't materialise, this increased margin will become revenue for the lender,” she said. British lenders are charging a considerable premium on mortgages with a smaller deposit. The most competitive deal worth up to 90 per cent of a property's value is from HSBC, which has a rate of 4.99 per cent for a two-year fix, with a £1,499 fee. Money-market rates used by banks to fund two-year fixed-rate mortgages in the eurozone were at 1.92 per cent yesterday, compared with 2.18 per cent in the UK. Money-market costs of providing the five-year fixes were 2.78 per cent in the eurozone compared with 3.17 per cent in the UK. The European Central Bank base rate is 1.25 per cent, while the Bank of England's base rate is 0.5 per cent.