Updated at 2.47pm
THE BANK OF Ireland has announced a cut in its mortgage rates for new borrowers – only hours after Permanent TSB moved on its lending costs.
The bank’s lowest variable rate for new customers will be 3.9% – effective immediately – for those borrowing up to 60% of a property’s value.
But homebuyers with smaller deposits and existing customers will miss out on all the benefits of the reduced floating rates.
Its rate for those with less than a 20% deposit remains unchanged at 4.5% on the latest figures.
The bank, which accounts for about 30% of all new mortgage lending in the country, said it was also launching a €2.5 billion mortgage fund to “meet customer demand” after its previous €2 billion war chest was spent.
It has also cut its fixed-term mortgage rates, which range from 3.8% for a 2-year period to a maximum 4.7% rate on a 10-year term. The biggest reductions were for the rates on its 5-year fixed term loans, which will now be up to 0.8% cheaper.
None of the new rates are available to existing Bank of Ireland mortgage holders, except those who are eligible to switch to the fixed terms.
Here’s how the full figures look for new customers:
Permanent TSB moves first
Meanwhile, Permanent TSB announced it was cutting mortgage rates for some new customers from next week.
The cuts will see variable mortgage rates fall from next Monday.
The new variable rate will be 4.2% for mortgages of 80%-90% of the value of the house – a drop of 0.39%.
The rate for other mortgages will drop by between 0.35% and 0.4%, depending on how much of the value of the house the mortgage loan is for.
The cuts will apply only to variable rates. Tracker, fixed and standard rates will remain unchanged.
The bank said that the new rates will make it one of the most competitive mortgage providers.
Permanent TSB currently has 13% of the mortgages in the country.
Richard Kelly, the head of mortgages at Permanent TSB, said the bank wants to grow the number of mortgages it has, but stressed that the bank will provide mortgages only to customers “who demonstrate affordability and are credit worthy”.
- Additional reporting by Peter Bodkin
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