Good news for house hunters as mortgage rate war 'on the horizon'
A mortgage price war has broken out after a second lender cut its variable and fixed rates.
Haven has cut its mortgage rates for new and existing borrowers.
The move follows reductions last month from its parent AIB, and are similar in magnitude.
Experts said Bank of Ireland, Ulster Bank, Permanent TSB and KBC would be forced to respond.
The Haven variable rate will fall by 0.25pc to 3.15pc from the start of next month for existing customers.
The same rate applies for new customers from later this month.
Savings of €320 a year for a family on a €200,000 mortgage over 30 years will result from the rate cut for existing customers.
There are also reductions in a string of fixed rates, which are proving increasingly popular with first-time buyers.
Haven is a subsidiary of AIB and sells mortgages through brokers.
Mark Whelan, of price comparison site Bonkers.ie, said this could be a sign a mortgage rate war is about to break out.
Haven's three-year fixed rate comes down by 0.45pc to 3.2pc.
The new one, two and three-year rates will be 3.2pc, with the four and also the five-year rates at 3.3pc. New fixed rates apply from today.
Five-year rates will be reduced by 0.5pc.
There are also reductions in LTV (loan-to-value) rates. These are rates that are lower the more equity you have in your home, or have a large deposit if you are a new buyer.
For those with a loan-to-value of 50pc or less the new rate will be 2.75pc, down from 3.1pc.
Mortgage holders with an LTV of 80pc or less will see the rate fall from 3.5pc, to 3.15pc.
Similar decreases in rates at EBS, which is also part of AIB, are expected in weeks.
Haven said this was the fifth reduction in three years. It said the rate cuts over the last three years mean a borrower with a mortgage of €200,000 will have saved about €1,500 a year.
Mr Whelan said Haven's mortgage rate cuts were great news for Irish borrowers, who have been paying more than their European counterparts for far too long.
"The bank's new standard variable rate will be the joint-best in the market and will save customers thousands of euro over the remainder of their loans," he said.
Mr Whelan said Haven's new 3.15pc rate for first-time buyers will be the joint-best in the market too, along with AIB's rate.
KBC and Ulster Bank are the next best options for first-time buyers, with rates of 3.5pc.
"This is the third significant mortgage rate announcement in the last three weeks, meaning there could be a rate war on the horizon.
"All eyes will now be on Bank of Ireland, Permanent TSB and Ulster Bank to see how they react," Mr Whelan said.
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