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AIB enters mortgage price war by cutting rates for customers


AIB has reduced rates for the second time in less than a year

AIB has reduced rates for the second time in less than a year

AIB has reduced rates for the second time in less than a year

A mortgage price war has broken out after the State's biggest lenders cut rates.

AIB has reacted to recent reductions from smaller competitors KBC and Ulster Bank.

It is the second time in less than a year that AIB has reduced its mortgage rates.

Rates have been steadily falling over the past few years, with value now available for those prepared to lock into fixed rates.

AIB will announce today that it is cutting its three-year and five-year fixed rates and its "green" fixed rate. They are coming down by up to 0.3pc.

Lower rates are also being introduced by AIB's Haven operation, which is mainly focused on mortgages sold through brokers.

AIB is the largest mortgage provider in the State. Its decision to cut rates will pile pressure on the other big player, Bank of Ireland.

AIB is cutting its three-year rate fixed rate by 0.3pc to 2.55pc and its five-year fixed rate by 0.3pc to 2.55pc.

Its green five-year rate goes down by 0.05pc to 2.45pc.

The green mortgage is for homes that have a BER (Building Energy Rating) of A1 to B3.

Haven rates are coming down by 0.3pc, with the three-year and five-year both decreasing to 2.55pc.

The new AIB and Haven rates are effective from today.


Customers of the bank currently on a variable rate of 3.15pc who switch to a green five-year fixed rate of 2.45pc will see a reduction of nearly €100 a month.

Over a year, this will work out at a saving of €1,150, based on a mortgage of €270,000 over 25 years.

AIB is also announcing the introduction of what it says is Ireland's first end-to-end online digital mortgage.

This will mean first-time house buyers and movers will now be able to conduct the entire mortgage application online.

"Our new competitive fixed rates offer value and choice to complement our lowest variable offering in the market," AIB chief executive Colin Hunt said.

"And through our green mortgage we are supporting our customers in taking climate action."

The mortgage war has gathered pace in the past few months as the battle to sign up first-time buyers for mortgages has become more frantic.

Only this month, KBC cut its fixed rates by 0.3pc - its second reduction in six months.

Ulster Bank last month reduced its five-year rate to 2.2pc for those borrowing more than €300,000.

Ulster has also just introduced a new cash bonus for new buyers to get a house deposit together.

It is offering €2,000 in cash if new buyers save at least €10,000 for a deposit and take out a mortgage with it.