TRACKER mortgage customers could be moved to IBRC as part of a deal with the troika over improving the terms of the €30bn promissory note for the former Anglo Irish Bank.
Minister Michael Noonan indicated that getting the loss- making tracker mortgages off the books of AIB, Permanent TSB and Bank of Ireland was a key part of negotiations with the European Central Bank.
"Having a final restructuring of some of the elements of the bank would give us a much stronger banking system," he said.
"But as well as that it would give you banks that would have value, and, further down the line it would be possible to sell the State's shareholdings in those banks at considerable amounts of money, which, would reduce the debt in turn."
However, he insisted that "nothing is agreed".
The State is due to make the first yearly payment of €3.1bn at the end of this month.
But by moving the loss-making tracker mortgages to Irish Bank Resolution Corporation (IBRC) -- the former Anglo Irish Bank and Irish Nationwide Building Society -- could mean that a smaller amount of €1.5bn a year could be paid.
The estimated cost of interest for the loan is at least €17bn.
Tracker mortgages make up more than 50pc of Irish banks' residential property loans.
They are not currently earning due to a mismatch between high funding costs and the low ECB rate which they track.
Michael Dowling from the Independent Mortgage Advisors Federation said that although mortgages are long term products spread out over 20 to 35 years, during the boom times banks were borrowing on the short term to fund these mortgages.
Now there are 400,000 tracker mortgages on an average rate of 2pc and the banks are paying out rates of 3 to 4pc on deposits.
But he said that if homeowners' mortgages are moved from Irish banks to IBRC it would make no difference in the terms and conditions of the loan.
"All it means is that the loan will be housed in a different bank," Mr Dowling said.
"The rate is linked directly to the ECB rate.
"We've all succeeded in getting the message out that the tracker mortgage is a very valuable commodity.
"Nobody should move from this if they have it.
"If you are in difficulties or have missed repayments, the bank can't take you off the tracker mortgage."
The exact terms of the deal are yet to be hammered out but Mr Noonan said a final restructuring of some of the elements of the bank would give us "a much stronger banking system".
A policy paper by Ireland's European partners and the IMF is being drawn up on a possible promissory note deal, Mr Noonan said. Ireland would then seek the political support of its European partners.
"I would like to see a situation where the repayment schedule on the Anglo Irish debt was more affordable and that would mean, in very simple terms, re-engineering the repayment schedule so we would have a longer time to repay at lower interest rates," Mr Noonan said.
The first scheduled payment is due at the end of March.