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Mortgages

AIB the latest bank to cut its mortgage rates

Daragh Cassidy

Daragh Cassidy

Head Writer

The State's largest bank has cut its fixed-rate mortgages by up to 0.45% while introducing a new 10-year fixed rate.

AIB has become the latest bank to cut its mortgage rates following hot on the heels of a recent rate reduction from Finance Ireland.

The changes mean a first-time buyer who’s borrowing €225,000 over 30 years, and who chooses a five-year fixed rate, will pay almost €55 less a month - a saving of almost €660 a year!

What are AIB's new fixed rates?

AIB Fixed Rate

Old

New

Reduction

1-year

3.20%

3.15%

-0.05%

2-year

3.20%

3.15%

-0.05%

3-year

3.20%

2.85%

-0.35%

4-year

3.30%

2.85%

-0.45%

5-year

3.30%

2.85%

-0.45%

7-year

3.50%

3.15%

-0.35%

New 10-year fixed rate

AIB has also launched a new 10-year fixed rate, joining KBC and Bank of Ireland in offering the security of a fixed rate over an entire decade. And at 3.30% it’s now the best 10-year rate on offer.

Catching up with Europe?

In most other European countries mortgage holders have the opportunity to fix for up to 20 or 25 years. This isn’t the case in Ireland where a 10-year rate is the longest that’s currently available.

However it’s good to see more banks offering fixed rates over longer time periods. Permanent TSB and Finance Ireland recently launched new seven-year fixed rates and it must only be a matter of time before more banks offer fixed rates over even longer time periods.

Around 70% of new mortgages in Ireland are now fixed, slightly below the Eurozone average of around 80%, and a huge turnaround from a few years ago when the vast majority of mortgages were on variable rates.

See here for an outline of the pros and cons of a fixed versus a variable rate.

Bank

10-Year Fixed Rate

Monthly Repayment Amount*

AIB

3.30%

€985.40

Bank of Ireland

3.70%

€1,035.64

KBC

3.75%**

€1,042.01

€225,000 borrowed over 30 years, 90% LTV.

**KBC current account customers

Who are AIB’s new rates available to?

The rates are available to new customers as well as existing AIB customers who are on a variable rate with the bank and wish to move to a fixed rate.

If you’re an existing fixed-rate customer you'll need to wait until the end of your current fixed rate, otherwise you’ll be charged a breakage fee.

The rates are also only available to residential customers who are buying a home as their primary residence - in others words these rates aren’t available to investors.  

Before you decide, always compare

Although the new rates from AIB might seem tempting, make sure you compare all rates across all lenders on bonkers.ie before you commit with our free, easy-to-use mortgage calculator.

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