Customers to save hundreds as AIB cuts variable mortgage rate
AIB has announced a 0.25pc reduction in its standard variable rate (SVR) on mortgages, the fifth rate reduction for existing customers in three years.
The banks variable rate will reduce to 3.15pc, which is the lowest variable rate on the Irish market.
The cut will apply to both new and existing AIB customers, with 100,000 mortgage holders set to benefit from the reduction.
"These improvements in variable rate offerings benefit over 100,000 customers, leading to very significant annual savings," Robert Mulhall, AIB managing director of retail and commercial banking in Ireland, said.
Based on the announcement, a customer will see an annual repayment saving of €315 on a €200,000 mortgage over 25 years.
At current rates, this represents a lifetime interest payment saving of approximately €7,800 on the same mortgage.
AIB has now cut its rates over the last three years by 1.25pc for SVR customers.
"Our strategy, when conditions allow, is to pass on variable rate reductions to both new and existing customers and we continue to do that. Therefore existing SVR customers will automatically benefit from these new variable rates," Mr Mulhall said.
In addition the bank will also cut its fixed rates by up to 0.5pc.
The move from AIB will put pressure on other banks in the Irish mortgage lending market, and it is expected that Ulster Bank, Permanent TSB, Bank of Ireland, and KBC Bank will follow suit with rate cuts.