Banks cut their mortgage interest rates

Banks cut their mortgage interest rates

Earlier this week two of the country’s biggest lenders announced plans to cut its mortgage rates.

Permanent TSB led the way when it said it will reduce its interest on variable interest-rate mortgages for new customers by between 0.36pc and 0.42pc.

Bank of Ireland later announced it will also cut its mortgage rates for new customers, and reduce some fixed rates only for existing variable-rate customers.

New customers of Bank of Ireland will be able to avail of a 4% two-year fixed rate, or 3.8% if their loan-to-value ratio is below 75%.

The bank is also offering a ten year fixed rate of 4.7% – or 4.5% where the loan-to-value ratio is below 75%.

Bank of Ireland said these rates would be available to existing business from the start of February.

The Permanent TSB variable rate for new mortgage customers will be 3.76pc – down 0.36pc on the current managed variable rate where the loan is 50pc or less of the value of the house.

Where the mortgage is between 50pc and 60pc of the house value, the rate will be cut from 4.15pc to 3.8pc, while loan-to-value ratios of between 60pc and 70pc will see a new rate of 3.9pc, compared with 4.25pc.

The managed variable rate for customers whose loan is between 70pc and 80pc of the value of the house will see a cut of 0.42pc to an APR of 4.07pc.

The changes will come into effect from January 12.

Similar interest rates from AIB range between 3.85pc and 4.25pc. Bank of Ireland’s rates range between 4.1pc and 4.5pc.

In a statement, PTSB’s head of mortgages Richard Kelly said the new rates “highlighted Permanent TSB’s position as a strong competitive force in the mortgage market”.

“We have grown our market share to 13pc over the past two years and we are determined to continue that momentum into 2015. These new rates show that Permanent TSB is bringing real competition to the mortgage market and we will continue to provide mortgage credit to those customers who demonstrate affordability and are credit worthy,” he added.

The bank has also announced a series of cuts to its fixed-rate mortgages for new residential customers.

Permanent TSB will also make four and five-year fixed-rate terms available to new mortgage customers.

Currently fixed terms are only available for one-, two- and three-year terms.

The lender is also cutting rates for buy-to-let owners by as much as 0.5pc. Those rates will vary between 4.9pc and well over 5pc.

The move to cut rates comes a month after AIB cut its rates and ahead of the implementation of the Central Bank’s plan to tighten mortgage lending sharply.

The Government is said to be expecting the Central Bank to rollback somewhat on its plan to cap mortgage lending at three-and-a-half times income and a 20pc deposit across the board.

Bank of Ireland confirmed in December it would extend, for another year, its offer to pay stamp duty for first-time buyers.

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