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AIB Group announced today that it is to cut standard variable mortgage rates. The move will benefit 158,000 customers with mortgages at AIB, EBS and Haven.
Today’s mortgage interest rate cut announcement comes on heels of AIB boss David Duffy’s appearance before the Oireachtas Finance Committee last week where he hinted that a rate cut could be on the cards in a “couple of months”.
AIB Group said that the rate cuts would take effect from June and bring standard variable mortgage rates below 4% across the Group’s AIB, EBS and Haven brands. The rate reductions will apply to both new and existing customers and owner occupier and buy to-let mortgages.
The rate cuts to standard variable mortgages are:
|Bank||Rate Cut||Old Rate||New Rate|
How much will you save?
So if you have a standard variable mortgage with any of the three banks, the big question is – how much will you save from June?
The chart below shows how much you’ll pay per €100,000 over 25 years and the saving you’ll make based on today’s rate cut announcement.
|Bank||Current Payment||New Payment||Monthly Saving||Annual Saving|
Today represents the second time that AIB Group has announced a cut to standard variable mortgage rates in the last six months. Customers of the three banks also received a rate cut of 0.25% in December 2014.
Prior to December’s rate cut, customers were paying 4.40% with AIB, 4.58% with EBS and 4.60% with Haven. Combined, the rate cuts in December and June could represent savings of between €334 (AIB) and €424 (Haven) a year per €100,000 borrowed over 25 years.
Today, Bernard Byrne, AIB’s Director of Retail and Business Banking said that: “AIB’s second reduction in mortgage interest rates in six months reflects the Bank’s improved financial performance.”
Allied Irish Bank has been under pressure to reduce mortgage interest rates from the government. The public and the media have also played their part in applying pressure, with the Irish Independent’s Campaign for Mortgage Fairness helping to keep mortgage interest rates in the limelight. Today’s rate cut announcement should offer hope that other lenders will cut rates too.