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Mortgages

Bank of Ireland cuts mortgage rates as competition heats up

Mark Whelan

Mark Whelan

Former Head of Communications & Events

Bank of Ireland has become the fourth bank to cut mortgage rates in the last six weeks - are we on the verge of a mortgage rate war?

The Irish mortgage market is heating up again, spelling good news for prospective borrowers.

Following mortgage rate cuts from AIB, Haven and EBS; Bank of Ireland has announced a range of cuts to its fixed mortgage rates.

Bank of Ireland’s mortgage rate cuts

Bank of Ireland’s rate cut means that you can fix your mortgage rate at 3.00% for one, two or five years, regardless of your loan-to-value ratio.

The bank’s one-year fixed rate for first-time buyers has fallen from 3.35% to 3.00%.

While a cut of 0.35% may not sound like much in isolation, it will add up to a significantly lower mortgage repayment over the lifetime of a loan.

Let’s say you’re a first-time buyer with a loan-to-value ratio of 90% borrowing €270,000 over 30 years. At Bank of Ireland’s new 3.00% rate, you’ll end up paying about €1,138 per month, which is €52 cheaper than it was at the previous 3.35% rate.

Bank of Ireland has also introduced a 10-year fixed rate of 3.50% for borrowers with a loan-to-value ratio of over 80%.

Is this a mortgage rate war?

Bank of Ireland is the fourth bank to cut mortgage rates since late September, meaning that there is finally some healthy competition entering the Irish mortgage market, which is good news for borrowers.

On November 1st, AIB cut its standard variable rate to a market-leading 3.15% and cut a range of its fixed rates too.

Haven has also cut its standard variable rate, while EBS has cut a range of fixed mortgage rates.

KBC also recently introduced a new, competitive 10-year fixed rate mortgage product.

This quick succession of positive rate changes suggests that a mortgage rate war is underway. All eyes will now be on other banks to see how they react.

How to find the best mortgage rate

The recent flurry of mortgage rate cuts from Bank of Ireland, AIB, Haven and EBS make it more important than ever to consider all of your options before committing to one bank. After all, you don’t want to miss a new, competitive rate.

If you’re a first-time buyer, a mover or an existing mortgage holder looking to switch bank, you can see which bank is offering the best rate for you over on our Mortgage Calculator page.

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