Wednesday 28 September 2016

Banks to cut mortgage rates or offer new deals

Published 22/05/2015 | 02:30

The country’s banks have all agreed to cut variable-interest rates or offer customers the opportunity to switch to more favourable fixed rates, the Irish Independent can reveal.

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Finance Minister Michael Noonan will today declare victory over the lenders in a long-running dispute over the interest being paid by 300,000 homeowners.

The move follows a series of meetings between Mr Noonan and AIB, Bank of Ireland, Ulster Bank, Permanent TSB, ACC and KBC.

The news will come as a welcome relief to borrowers who have been paying the highest rates in Europe.

It is expected that by early July, arrangements will be in place for variable rates to be reduced, most likely by around 0.25pc.

A further cut by each of the banks has also been pencilled in for September.

Alternatively, homeowners will be given the option of dropping their variable rate altogether and switching to a fixed-rate mortgage.

Ultimately, it is hoped that all customers will be able to access a mortgage interest rate of below 4pc.

“There was a game of chicken going and it seems the banks broke first,” said a source.

A 0.25pc cut in the variable-mortgage rate would save a family with a 25-year, €300,000 mortgage €42 a month.

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