AIB cuts mortgage rates in move that is hoped will spur rivals to ...
AIB has cut some of its mortgage rates in a move that consumers hope will prompt its rivals to also reduce lending rates.
It is reducing the cost of its green mortgages, which tend to have lower rates and are available for properties with a Building Energy Rating (BER) of B3 or higher. These homes tend to be more efficient and so are cheaper to run.
AIB and its subsidiaries EBS and Haven will cut their green mortgage rates by 0.2 percentage points from Tuesday.
The new rates are available to both new and existing customers.
The lender said the reductions will mean its three brands will offer the lowest green mortgage rates in Ireland.
The AIB Green five-year fixed rate, for a loan-to-value (LTV) ratio of less than 50pc, goes from 3.65pc to 3.45pc.
The same fixed rate for those with an LTV of 80pc to 90pc goes from 3.85pc to 3.65pc.
The EBS Green four-year rate goes from 3.75pc to 3.55pc, and the Haven four year rate goes from 3.65pc to 3.45pc.
These rates are also available to customers who have a mortgage with AIB Group if their home has a BER rating between A1 and B3 and there are more than five years left on the loan.
Customers taking up the new lower rate can save around €387 annually with a green mortgage, AIB said.
According to the Sustainable Energy Authority of Ireland in the first half of 2023, more than 19,000 home energy upgrades were completed by people availing of SEAI grants.
AIB said people who have retrofitted their home may also qualify for a green mortgage.
AIB’s managing director of retail banking, Geraldine Casey, said: “I would encourage customers to check if they are eligible for a cheaper rate, particularly those who have carried out retrofitting work on their homes to improve the energy rating to between A1 and B3.
“Reducing our green mortgage rates aligns with our strategy to further green our loan book as we support customers to make more sustainable choices.”
The bank said a monthly repayment on a new €300,000 AIB five-year Green fixed rate mortgage with a loan to value of 50pc to 80pc over a 25-year term will be €1,508.70.
The previous monthly repayment would have been €1,540.98, representing a saving of €32.28, €387.36 annually, or €1,936.80 over the five-year term.
Last month PTSB cut one of its fixed mortgage rates for new customers for the second time, in a move brokers said was to ensure it did not lose business to Bank of Ireland and AIB.
It also introduced a new three-year fixed rate for green mortgages, with rates from 3.80pc for new customers.
However, existing PTSB customers coming off fixed rates will not be able to apply for the new green rate or the lower four-year fixed rate.
The four-year fixed rate is coming down by 0.30 percentage points. This is the second reduction to the bank’s four-year fixed rate, which was last cut in December.
