In recent times a lot of the focus from banks has been on reducing their fixed rates, which now account for over 70% of all new mortgages issued here. So Ulster Bank has surprised the market somewhat by reducing one of its key variable rates.
It’s been a while since we’ve seen any price movement in the variable rate market but that’s changing today with the announcement from Ulster Bank that it’s reducing one of its key variable rates.
What’s changing?
Ulster Bank is reducing its variable rate for those with a 10% deposit from 4.30% to 3.90%.
This variable rate reduction is the first in the market since KCB reduced some of its variable rates in early 2018.
Although the reduction still leaves Ulster Bank’s variable rate as one of the more expensive on the market, it means a first-time buyer borrowing €225,00 would save over €50 a month.
The new rate is available to both new and existing customers.
Can I get a better rate?
If you’re lucky enough to have a deposit of 20% or more then you could get a lower variable rate of 3.70% with Ulster Bank. And if you have a deposit of 40% or more you can get a rate of 3.50%.
This is because the more equity you have to stump up, the less risky you are as a borrower in the eyes of a bank, so they’ll be prepared to offer you a cheaper rate.
Also, if you’re an Ulster Bank current account customer you’ll be offered a cheaper rate too. For example, a first-time buyer with a 10% deposit who also has a current account with the bank will get a rate of 3.60% instead.
And if you're happy to go with a fixed rate, then Ulster Bank offers rates as low as 2.30%.
See here for more info on the pros and cons of fixed versus variable rates.
Ulster Bank variable rates for non current account customers
|
Product |
Rate |
Loan-to-Value Ratio |
|
Variable Rate |
3.50% |
60% |
|
Variable Rate |
3.70% |
80% |
|
Variable Rate |
3.90% |
90% |
Ulster Bank variable rates for current account customers
|
Product |
Rate |
Loan-to-Value Ratio |
|
Loyalty Variable Rate |
3.10% |
60% |
|
Loyalty Variable Rate |
3.20% |
80% |
|
Loyalty Variable Rate |
3.60% |
90% |
What's next for interest rates?
Recently Bank of Ireland’s chief financial officer had signalled that interest rates had gone as low as they could in Ireland.
The bank subsequently got into trouble from the Competition and Consumer Protection Commission (CCPC) for 'price signalling' to the market.
But this move from Ulster Bank, as well as a potential rate cut from the ECB due to a slowing world economy, suggests there may be room for further cuts in the near future.
