Bank of Ireland has announced a 0.5% reduction in its mortgage lending rates, making it the latest lender to cut rates amid easing interest rates from the European Central Bank (ECB). The rate reduction applies to both new and existing customers, and will be effective from today.
The bank’s director of homebuying, Alan Hartley, emphasized the importance of providing value to customers. “Offering value to our customers is important, so this 0.50% cut is being applied to our full suite of fixed-rate products,” Hartley said. The reduction applies across the full range of Building Energy Ratings (BER) from A to G, ensuring that all homeowners benefit from the change, not just those with the highest energy ratings.
The rate cuts mean that a 4-year fixed-rate mortgage is now available from 3.1%, depending on the BER of the property. For a typical €300,000 mortgage, this reduction could lead to an annual saving of approximately €1,000 when compared to the previous 4-year fixed rates. Additionally, the bank is introducing a new 1-year fixed-rate product, starting at 3.3% for mortgages of €250,000 or more.
While Bank of Ireland is lowering its mortgage rates, it is also making changes to its deposit offerings. The bank will discontinue its 24-month fixed term deposit account, which had an Annual Equivalent Rate (AER) of 2.96%, replacing it with a new 18-month fixed term deposit account offering an AER of 2.98%.
This move comes as a response to a series of interest rate cuts by the European Central Bank, which has reduced rates three times since June, by a total of 0.75%. Analysts anticipate a further reduction of at least 0.25% during the ECB’s upcoming December meeting.
Recent figures from the Central Bank show that Irish mortgage rates have dropped to their lowest level in over a year. In September, mortgage rates eased to 4.08%, down slightly from 4.11% in August. Despite the reduction, Irish mortgage rates remain among the highest in the eurozone, with the average rate in the region at 3.59%, placing Ireland’s rates as the joint sixth highest.
Bank of Ireland’s move to reduce mortgage rates follows broader trends in the banking sector, as both traditional banks and non-bank lenders adjust their lending and deposit products in response to the changing interest rate environment.
