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Mortgages

Bank of Ireland cuts mortgage rates

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Mark Whelan

Mark Whelan

Former Head of Communications & Events

Bank of Ireland has become the fourth bank to cut mortgage rates in the last two months, so what do the rate cuts mean for first-time buyers and existing customers?

Last month, the Central Bank of Ireland revealed that more than half of first-time buyers in H2 2016 opted for fixed rates over variable rates.

It appears that house hunters are placing more and more value on the certainty of a set rate in Ireland’s legendarily unpredictable property market.

The fixed rate trend looks set to continue this year too, with Permanent TSB, KBC and Ulster Bank all announcing fixed rate cuts in the last two months.

And now Bank of Ireland has followed suit by announcing a range of fixed rate cuts of its own, which will be available to new and existing customers.

What do the cuts mean for first-time buyers?

Bank of Ireland has cut its one-year, two-year, three-year and five-year fixed rates for first-time buyers with an LTV of 81%-90% by 0.25%.

While a cut of 0.25% may not sound like much in isolation, it can add up to significant savings over the lifetime of a loan.

Let’s look at an example.

Say you’re buying a house for €300,000 and are borrowing €270,000 (which gives you an LTV of 90% and therefore qualifies you for Bank of Ireland's new rates).

On the outgoing 3-year fixed rate of 3.45%, you’ll pay €1,196 a month in repayments.

But on the bank’s reduced rate of 3.20%, you’ll pay €1,160, which is €36 less every month. And that adds up to a saving of €432 over the course of a year.

First-time buyers can still get up to 3% cashback on the mortgage with Bank of Ireland too.

What other rates have been cut?

Cuts of between 0.1% and 0.25% have also been made to Bank of Ireland’s one-year, two-year, three-year, five-year and even 10-year fixed rates for customers with LTVs of under 60% and up to 80%.

Borrowers with other banks who aren’t happy with the amount leaving their account every month should take note of these new reduced rates, which are among the lowest in the market right now.

Can existing Bank of Ireland customers benefit?

Bank of Ireland has reserved some its biggest cuts for existing customers.

For example, existing customers with an LTV of between 81% and 90% can now get a two-year fixed rate or a five-year fixed rate of 3.20%, which is a reduction of 0.35%.

Meanwhile, customers with a mid-range LTV of between 61% and 80% can now get a two-year fixed rate of 3.00%, which is down from 3.25%.

Falling fixed rates

Households in Ireland have been paying more than others in Europe for some time, but Irish mortgage rates are finally starting to fall.

Bank of Ireland is the fourth bank in just two months to cut fixed rates, and the lifetime savings can add up to significant amounts.

If you’re a first-time buyer weighing up your mortgage options, you might want to come to our First-Time Buyers Mortgage Workshop on June 29th in The Dean Hotel in Dublin.

At the event, we will explain the entire mortgage process and give you the information needed to make the right decision. Tickets are free but advance booking is essential.

And as always, you can see which bank is offering the best rate for you by visiting our Mortgage Comparison page.

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