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Image Cautious competition as banks cut mortgage rates
Image Simon Moynihan
Staff Writer


Ulster Bank has reduced interest rates across a range of fixed and variable rate mortgage products.

The new rates, which take effect today, will see the Ulster Bank standard variable rate fall by 0.20% from 4.50% APR to 4.30%.

Amongst the new rates, Ulster Bank’s is now offering a variable rate of 3.9% for a loan to value of less than 80% which represents a cut of 0.10%. This cut could save mortgage holders around €12 per month on a typical €200,000 variable mortgage over 20 years.

Ulster Bank has also reduced interest rates across its range of fixed rate mortgages by up to 0.40% APR. Ulster Bank’s 3 year fixed rate <80% LTV mortgage rate has been reduced from 3.99% APR to 3.75% APR. This cut will reduce the cost of borrowing by around €25 per month for a €200,000 mortgage over 20 years.

Ulster Bank has also introduced a range of 60% LTV products which offer high earners with large deposits the bank’s best interest rates. Individuals earning more than €70,000 per annum can avail of Ulster Bank’s top 3.8% variable rate mortgage or a fixed 3 year rate of 3.65%.


KBC has also announced today that it has reduced interest rates on some of its fixed rate mortgages. A cut of 0.20% has been implemented across some existing customer fixed rates and cuts of up to 0.79% have been introduced for five year fixed rates for new customers.

KBC’s five year fixed rate <60% LTV mortgage has been substantially reduced from 4.55% to 3.80%

KBC is now offering a five year fixed rate of 3.80% for an LTV of <60% down from 4.55%.

KBC is also offering a 3 year fixed rate of 3.60% for <60% LTV.*

AIB, Permanent TSB and Bank of Ireland

Recent mortgage interest rate cuts, which seem to have concluded today, began in December when AIB reduced variable interest rates by 0.25%. AIB cut its standard rate from 4.40% to 4.15% and its subsidiaries Haven and EBS introduced similar cuts.

In January, Permanent TSB followed suit by cutting rates and introducing a 3.70% interest rate on its <50 LTV mortgage.

Bank of Ireland also cut rates in January for some customers.

ECB Rate

The European Central Bank rate, which has remained at a record 0.05% since September 2014, has meant that tracker mortgage holders are now generally paying less than 1% interest on their home loans. This represents a difference of nearly 3% over the current best rates available to new customers. With this difference, tracker repayments can be around €300 less per month on €200,000 borrowed over 20 years compared to the best new customer rates. says

Managing Director of David Kerr said: “The banks seem to have come alive over the past few months, and cutting mortgage interest rates gives a strong indication that there is money now available to borrowers.”

Mr Kerr concluded: “What I think we’re seeing now is cautious competition. The banks are lending certainly, but the best rates seem to be available to high earners or those with the ability to put down large deposits.”


* the KBC rates listed here include a 0.20% bonus for KBC current account holders.