It’s been quite a day for the Irish mortgage market.
Following the news of AIB’s 0.25% standard variable rate cut, KBC has wasted little time in responding.
The bank has announced a 0.10% cut in variable mortgage rates for new customers with a loan-to-value ratio of under 80%, as well as cuts to a number fixed rates for new and existing customers.
The move takes KBC’s leading variable rate down to 3.2% (for new customers that take KBC current accounts) and is sure to amplify the shockwaves being sent through the mortgage market.
The mortgage rate cuts will come into effect on May 17th and are accompanied by some new options for existing customers too.
Interestingly, the bank's standard variable rate, which currently stands at 4.25% for non-current account holders, will remain unchanged.
From May 17th, existing customers can sign up to KBC’s two-, three- and five-year fixed rate products will see their rates cut by 0.20% and will have the option of fixing their mortgage rate at a figure as low as 3.7% for two years. But they must open a current account with the bank if they don't already have one in order to get this rate.
A third major piece of news from KBC is that, between May 23rd and 28th, it will be actively encouraging customers to switch mortgages. The bank will be specifically targeting the 87% of Irish customers who have not switched banks in the last three years.
To encourage switching, the bank is offering €2,000 towards the professional fees associated with the process until the end of September. Similar cash offers are also available from other major banks.
Another potentially appealing aspect of KBC's offer is a 50% discount on home insurance in year one for all of its mortgage customers.
Mortgage switching doubled in the first three months of 2016 compared to Q1 of 2015 and the moves by AIB and KBC today are likely to see a further increase in the number of Irish mortgage holders taking advantage of falling rates.
Find out if you would benefit from switching mortgages on our Compare Mortgages page now.
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