Bank of Ireland accused of 'marketing gimmick' on new deal
Bank of Ireland has been accused of a marketing gimmick after it introduced a new mortgage product that does not offer cashback.
The bank has been maintaining a strong market share by offering up to 3pc in cashback of the value of the mortgage drawn down. This counters the fact that its rates are not the lowest in the market.
Cashback means that a family borrowing €300,000 can get back €9,000. The first 2pc of cashback is paid at the time the mortgage is drawn down, with the other 1pc paid at the end of year five.
But the bank has now introduced what it calls a High Value Mortgage Interest Rate with no cashback.
It is the first fixed-rate product without cashback that Bank of Ireland has done since its introduction of cashback in 2014.
It only applies to people borrowing €400,000 or more, and is for new drawdowns only. The new product applies to residential properties only, and is aimed at first-time buyers, self-builds, equity release and switcher loans.
A spokesperson for the bank said those taking out the new loan could qualify for a 0.2pc discount on the interest rate if they are buying a house that is A-rated under the Building Energy Regulations, taking the rate down to 2.3pc over five years.
The bank became the first lender to offer a green mortgage when it launched the product last week.
But founder of the Askaboutmoney.com website Brendan Burgess accused the bank of a marketing gimmick.
"This is purely a marketing gimmick. They can now advertise fixed rates as low as 2.3pc," he said.
"You would only go for this if you are a new customer, borrowing over €400,000 to buy an A-rated house and you can't do basic maths."