KBC Bank ups the ante in mortgage market war with cuts in fixed rates
MORTGAGE holders are set to benefit with another lender is set to cut their lending rates.
KBC Bank is to reduce its fixed rate mortgage costs by up to 0.55pc.
There will be reductions across its one, two, three and five-year rates, with the new deals to apply to new and existing customers.
The bank will have the lowest one, three and five year rates in the market when the cuts are implemented on September 3.
The reductions will mean monthly repayments on the five year rate will come down by €137 for a family with a €300,000 mortgage. Over a year this works out at a saving of €1,600.
It comes after Ulster Bank shocked the market last month by introducing a new two-year fixed rate of 2.3pc.
Now KBC Bank is to cut its rates for first-time buyers, movers and switchers. It last reduced its fixed rates in March.
Existing customers who are not already on a fixed rate will be able to apply for the new deal. The reductions on the fixed rates are between 0.25pc and 0.55pc.
From the autumn the one-year rate will come down by 0.4pc to 2.5pc, assuming they get a 0.2pc discount on their mortgage for using the KBC current account.
Other fixed rates are based on the equity built up in the home, or the size of a deposit new buyers have. This is what is referred to as the loan to value.
The two-year rate for those with a loan to value of less than 60pc comes down by 0.3pc to 2.5pc, for those using the KBC current account.
The three-year rate for those with a loan to value of between 80pc and 90pc will be 2.65pc.
Five-year fixed rates for those with a LTV of between 80pc and 90pc will be reduced by 0.55pc to 2.8pc.
Director of products at KBC Bank Fergal O’Riagain said: “This reduction is part of our ongoing commitment to provide customers with better long-term value and lower mortgage repayments.”
Permanent TSB two weeks ago reduced its two, three and five-year rates for existing customers by 0.5pc.
The two and three-year rates have gone from 4.20pc to 3.7pc for existing customers who lock into it, with the five-year going from 4.30pc to 3.7pc.
The Central Bank confirmed last week that home buyers in this country are paying thousands of euro more a year than people on the continent.
This is because mortgage rates in this country continue to be the highest in the Eurozone.