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Ulster Bank cuts fixed rates as mortgage price war intensifies

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Paperless: Ulster Bank’s Ciarán Coyle said customers can apply online. Photo: Shane O'Neill

Paperless: Ulster Bank’s Ciarán Coyle said customers can apply online. Photo: Shane O'Neill

Paperless: Ulster Bank’s Ciarán Coyle said customers can apply online. Photo: Shane O'Neill

Ulster Bank is to cut its mortgage rates as the home-loan price war gathers pace.

Almost all fixed rates are coming down from Thursday, in a move that will mean a number of its rates will be the lowest in the market.

The lender is also making its low 2.2pc fixed rate available to more borrowers.

It has reduced the minimum loan amount from €300,000 to €250,000 for its five-year fixed rate of 2.2pc.

The move comes just months after Spanish-owned Avant Money launched in this market with rates that undercut existing players.

The new Ulster Bank rates apply to first-time buyers, movers and switchers. Cuts of up to 0.35 percentage points are being implemented.

Ulster Bank said it will have the lowest two-, four- and ten-year fixed rates for those new buyers, switchers and movers borrowing up to 80pc of the value of the home.

It said that those with a 10pc deposit will be able to avail of the lowest four- and 10-year rates.

The bank has also cut its five-year fixed rate.

As a result of the reductions a customer with a 25-year, €250,000 mortgage, on a variable rate of 4.5pc, could save over €300 on their monthly repayments over five years. This assumes the customer is borrowing 80pc of the value of the property.

Up to now the bank had different rates for those availing of exemptions from the Central Bank lending limits. But borrowers seeking an exemption will no longer have to pay a higher rate.

And Ulster Bank is reopening loan-to-income exception lending for applications from first- and second-time buyers, up to 80pc loan-to-value (LTV).

Previously, exceptions were restricted to 90pc LTV for first-time buyers and 80pc LTV for second-time buyers.

This means customers who qualify for this can borrow more than 3.5 times their income.

Loan-to-value exception lending, which applies to second-time buyers, is also reopening.

Also from Thursday, the bank is introducing a digital paperless mortgage application process.

Ulster Bank’s managing director of personal banking, Ciarán Coyle, said the innovation puts customers in control and allows them to choose how they complete the journey, whether that’s online, with Ulster Bank’s video bankers, with their colleagues in branches or with telephone support.

He said: “These changes, coupled with the reduction in most of our fixed rates, enables us to really champion our customers at one of the most important financial moments of their lives.”

The bank denied its mortgage lending was under any pressure due to speculation Ulster Bank’s British parent may wind down its operation in this country.

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Karl Deeter, of online mortgage company Yes.ie, said the cuts represent the latest shot to be fired in the mortgage rate war.

“In response to Avant Money’s European-style rates, Ulster Bank has had to respond and now it means that other lenders are under even greater pressure to follow or beat these rates.”

He said this means customers will win. But they have to switch lender is they are paying high rates.

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