Monday 26 February 2018

Ulster Bank puts it up to rivals with mortgage cut for all customers

Ulster Bank
Ulster Bank
Charlie Weston

Charlie Weston

ULSTER Bank has ramped up the pressure on its rivals with a cut in its variable rates, for both new and existing customers.

The bank will also introduce a range of new fixed rates, which experts said were some of the lowest in the market.

The move comes just a week after the Central Bank announced new lending restrictions which are set to make it more difficult for first-time buyers to get a home loan.

Other lenders may now be forced to cut again, as despite recent cuts, mortgage rates here are still among the highest in the 19-member eurozone.

The Ulster Bank move to cut the variable rate for both new and established mortgage holders is in contrast to recent reductions from Bank of Ireland, Permanent TSB and KBC Bank, which were only for new customers and switchers.

AIB and EBS had reduced its rates for new and existing customers before Christmas.

The reduction in the Ulster Bank standard variable rate will see it come down by 0.2pc to 4.3pc, a move that will save a couple with a €250,000 mortgage around €350 in the full year.

This will be one of the lowest variable rates in the market. It is almost two years since Ulster Bank cut its variable rate.

The lower variable rate for its thousands of customers takes effect from the start of March. Fixed rates come down later this month.

The bank has also introduced lower, loan-to-value mortgages, aimed at new home buyers and switchers. Existing customers on variable loan-to-value mortgages will benefit from a 0.2pc cut in these rates. And the bank is set to sell mortgages through brokers again, for the first time since the financial collapse.

Ulster will join the chase for switchers, who are not affected by new Central Bank rules on the sizes of deposits.

It will offer a market-low rate of 3.8pc for those with a deposit of 40pc of the property's value.

This is likely to appeal to switchers who have paid off at least a large chunk of their mortgage, relative to the value of the property.

Head of branch banking at Ulster Bank Jim Ryan said: "These lowest ever rates, which include a number of market-leading rates, are providing us with a fantastic opportunity to help more customers buy their dream home, or save money on their existing deal by switching to us."

The mortgage interest rate cuts come after it emerged that there was a surge in applications for home loans last year.

The fear of being caught by new lending restrictions prompted the 44pc rise in mortgage applications.

More than 26,576 people applied for a mortgage during 2014. This is 8,000 more applications than the previous year.

Not all the applications will turn into mortgage draw-downs, but economists said that potential buyers were anxious to have approval in place to avoid the new Central Bank lending restrictions.

Economist with Goodbody Stockbrokers Dermot O'Leary said: "The threat of tighter mortgage lending standards triggered a further acceleration in applications in the final quarter of the year."

In the last three months of last year there was a 58pc rise in mortgage approvals.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business