MORTGAGE payments for first-time buyers can vary by as much as €1,400, new figures have revealed.
The difference in the rates charged for a €200,000 mortgage by the cheapest lender, AIB, and the dearest, ICS Building Society, a subsidiary of Bank of Ireland, works out at €118 a month in repayments, or €1,416 a year.
ICS operates mainly through brokers and will often lend to new buyers when others, including its parent Bank of Ireland, turn down applicants.
Across the market as a whole, brokers report that up to four- fifths of mortgage applications are being turned down.
The difference in interest rates was highlighted as AIB increased its standard variable rates from today.
Its variable rate for new buyers goes up to between 3.5pc and 3.7pc. The higher rate is for those who have a deposit of less than 20pc.
Last Friday, Bank of Ireland and ICS increased lending rates for new buyers by 0.5pc.
The moves by both banks come just two months after the European Central Bank cut its rate to a record low of 0.75pc. The ECB could cut its rate again when it meets on Thursday.
ICS has emerged as the most expensive for new mortgages for first-time buyers: its 4.8pc rate far exceeds that of AIB, which charges 3.74pc.
The news of the higher rates comes as Permanent TSB said that, from this week, it would offer all new buyers a rate of 3.99pc for a year.
Up to now, it had two different rates depending on the deposit. The new introductory rate rises to 4.34pc after a year.
Founder of the Askaboutmoney.com website, Brendan Burgess, said mortgage rates for new buyers had risen to such an extent that banks were making profits from first-time buyers.
Financial adviser Karl Deeter said new buyers could often only get a mortgage from expensive lenders such as ICS.
Bank of Ireland and Ulster Bank are now charging 4.5pc for new buyers, while Haven, EBS and National Irish Bank charge 4.35pc, according to Mr Deeter.
KBC has a rate of 4.25pc.