Haven has announced a range of cuts to its variable and fixed mortgage rates, in a move which will be welcomed by existing customers and first-time buyers alike.
Haven recently become the third bankin a row to make a significant mortgage rate announcement.
The bank also launched an initiative to help mortgage borrowers in long-term arrears a few weeks ago.
Haven’s new standard variable rate
On November 1st, Haven’s standard variable rate will fall from 3.40% to 3.15%.
This mirrors the rate cut due from AIB, which is the Haven’s parent company.
Haven’s 7,000 customers will save up to thousands of euro over the remainder of their mortgage loans as a result of the cut. Let’s take a look at an example.
Say a customer has €200,000 outstanding on their mortgage, to be paid over the next 25 years.
At Haven's existing standard variable rate, the customer would pay around €990 every month. But at the new reduced rate of 3.15%, she/he would pay €964, which is €26 less per month.
That’s a saving of €312 a year, or €7,800 over the remainder of the loan.
Haven’s rate cuts are also good news for prospective buyers.
The bank cut its variable rate for customers with a loan-to-value ratio of 50% or under to 2.75% and its rate for those with an LTV of 80% and over (i.e. first-time buyers) to 3.15%.
These cuts took effect on October 18th, meaning that Haven now has the joint-best rate on the market for first-time buyers. This will be matched by AIB, when its cut kicks in on November 1st.
KBC and Ulster Bank are both offering rates of 3.50% first-time buyers who have a current account.
EBS and Permanent TSB offer a rate of 3.70% along with 2% cashback, Pepper is offering 3.90% and Bank of Ireland is offering 4.50% along with 3% cashback.
How much will first-time buyers save?
Let’s say you’re a first-time buyer looking to purchase a €300,000 home (the average value of a first-time buyer property in 2016 was €250,361) and are borrowing €270,000 over 30 years.
At Haven’s outgoing rate of 3.50%, your monthly repayments would be about €1,212.
But at the bank’s new 3.15% rate, your monthly repayments would come in at €1,160 or so - €52 cheaper every month.
A saving of €52 every month over a 30-year loan adds up to an incredible €18,720.
Haven’s new fixed rates
Haven cut a number of its fixed mortgage rates for new customers on October 6th.
The bank reduced its one-, two- and three-year fixed rates to 3.20% and its four- and five-year fixed rates to 3.30%.
Welcome news for Irish borrowers
bonkers.ie MD, David Kerr, has welcomed Haven’s rate cuts, saying:
“Haven’s new mortgage rates will be among the most competitive in the Irish market and are good news for existing customers and new borrowers alike.
We have seen three significant mortgage rate announcements in the last few weeks, which is an indicator of competition in the mortgage market. It will be interesting to see if other banks respond with cuts of their own”.