BoI moves to lower fixed-rate interest on mortgages
Bank of Ireland has lowered its mortgage rates again as the price war among the banks escalates.
The cuts to the lender's fixed-rate mortgages come after the European Central Bank signalled it would not push up interest rates until 2019 at the earliest.
Bank of Ireland is now offering interest rates of 3pc for its one, two, three and five-year fixed-rate mortgages, irrespective of loan to value.
In addition, the interest rate for the Bank's 10-year fixed product has been reduced to 3.3pc for loans up to 80pc of the property value and to 3.5pc for loans above 80pc loan to value.
Bank of Ireland's move comes as the competitive landscape intensifies with AIB and KBC also slashing rates in recent months. While Bank of Ireland's move will mean big savings for new and existing customers, its rates remain fractionally above the cheapest fixed rates in the market.
Karl Deeter of Irish Mortgage Brokers pointed out that Ulster Bank, with its four-year fixed mortgage rate at 2.6pc, remains the cheapest in this category, while Belgian Bank offers a one-year rate of 2.9pc.
Read More: Dad who kept home urges people to 'fight'
According to Mr Deeter, a homeowner on a €270,000, 25-year mortgage, and availing of the bank's two, three or five-year fixed rates of 3.2pc, will save about €339 a year on the new 3pc rate.
Fixed rates are determined typically by the loan-to-value level (LTV) but Bank of Ireland has harmonised the rates for its one, two, three and five-year fixed rates, meaning if a borrower requires a loan for more than 80pc of the property's principal, the cheaper rates still apply.
But Mr Deeter cautioned against fixed-rate mortgages at this point in the cycle.
He pointed out homeowners who want to switch to a different mortgage often wind up on the bank's standard variable rate for a certain period.
He said rates were falling still so customers could switch to lower standard variable rates offered by AIB and its subsidiary unit, Haven, before locking in a fixed-rate mortgage early next year.