| 15.1°C Dublin

Ulster Bank to pay €500 to homeowners who switch current account and mortgage to bank

The move comes after Bankinter announces it will enter Irish market and Permanent TSB announced cuts to all mortgage rates

Close

(Stock picture)

(Stock picture)

(Stock picture)

The mortgage market has got a new boost after Ulster Bank said it would pay €500 to homeowners who move their current account to the bank when they switch their home-loan to it.

The move comes after Spanish giant Bankinter said it was entering the market here in the autumn, and Permanent TSB announced cuts to all mortgage rates.

Ulster Bank said the new cash bonus was in addition to the €1,500 cash towards legal fees it offers to mortgage switchers.

The €500 offer is only available until September 21, and customers have to use the Ulster Bank current account as their main day-to-day transactions account.

Mortgage experts said the move was a sign of greater competitive forces in a home-loan market scarred by the impact of the pandemic.

Switchers are attractive to lenders as they have a track record of payments and tend to be in steady employment.

Ulster Bank has the lowest single mortgage rate in the market at 2.2pc, fixed over five years, according to price comparison site Bonkers.ie. But this rate is only available for those borrowing at least €300,000 and who have loan to value that is 80pc or less.

Close

Home: Ulster Bank’s current headquarters in George’s Quay, Dublin. Photo: Frank McGrath

Home: Ulster Bank’s current headquarters in George’s Quay, Dublin. Photo: Frank McGrath

Home: Ulster Bank’s current headquarters in George’s Quay, Dublin. Photo: Frank McGrath

The bank commissioned research that shows 53pc of mortgage holders said they had never thought about switching.

Another 32pc said that they had thought about switching, but never actually went through with it.

Ulster Bank’s head of home buying and ownership Lorraine Costelloe said: “While it may only be available for a limited time, this offer stands alongside with our existing €1,500 cash towards legal fees offer and great low fixed rates, all of which could be attractive for anyone who may be considering moving to a lower mortgage rate.”

Ulster Bank said a customer with a 25-year €200,000 mortgage on a variable rate of 4.5pc could save up to €233 on their monthly repayments over two years by switching to its two-year rate of 2.3pc.

It comes as Spanish banking giant Bankinter is to enter the Irish mortgage market in a move sure to put massive pressure on existing lenders to slash their rates.

The move came as Permanent TSB cut its variable and fixed rates, and performed a U-turn by making the rates available to existing customers, not just new borrowers.

Mortgage rates in this market are among the highest in the eurozone, and are twice the average across the currency bloc. They had started to rise again in May.

But now new entrant Avantcard is to enter the Irish mortgage market in the autumn. Its parent company is Bankinter, the fifth largest bank in Spain, where it has a huge mortgage book.

It is expected Avantcard, which will use the brand Avant Money, will offer fixed rates below 2pc. The average rate on a new mortgage across all lenders here is 2.87pc.

No lender currently offers a rate below 2pc in this market, according to mortgage broker Michael Dowling.

Online Editors