Wednesday 7 December 2016

Home loans cut – but rents soar

AIB and KBC reduce variable mortgage rates

Charlie Weston Personal Finance Editor

Published 10/05/2016 | 02:30

AIB and KBC have cut their mortgage rates in the wake of the formation of the new government. (Stock image)
AIB and KBC have cut their mortgage rates in the wake of the formation of the new government. (Stock image)

AIB and KBC have cut their mortgage rates in the wake of the formation of the new government.

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However, rents nationwide have gone above €1,000 a month on average for the first time since the financial collapse. The supply of properties to rent is now at its lowest level on record.

The pressure on banks to cut their variable rates will be ramped up further with a Dáil debate on giving powers to the Central Bank to enforce cuts in rates.

AIB said yesterday that it would reduce its variable rate for the fourth time in July. The bank is also offering €2,000 for professional fees in a bid to lure switchers. The bank has the lowest variable rate.

But the bank said the new lower rates apply only to AIB customers. No reduction was announced for mortgage holders at EBS and Haven, which it also owns. This means that about 80,000 customers will miss out on the latest decrease.

KBC Bank Ireland followed suit with a range of cuts to its rates, which come into effect from next week.

Not since May 2008 have average monthly rents across the State been at a level above €1,000, a new report from Daft.ie shows.

Rental costs shot up by 9.3pc in the last year, the Daft survey shows.

Surging rents are just one of the challenges facing new Housing Minister Simon Coveney as he begins his first week in the portfolio.

The Government has also performed a U-turn to ease the burden on homeowners in mortgage arrears.

The new deal means those in mortgage default will be in a stronger position to challenge their bank.

Irish Independent

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