AIB and Bank of Ireland have said they will keep their variable mortgage rates under review, following Permanent TSB’s move to cut its rates yesterday.
After a series of meetings between lenders and Minister for Finance Michael Noonan, banks were given until July 1st to offer cheaper mortgages to customers or risk sanctions.
In response, Permanent TSB has said it will allow about 70,000 mortgage customers on standard variable rates of 4.5 per cent to move to new rates that will start from 3.7 per cent.
The new rates will vary depending on the amount owed by customers and the current value of their home, and the highest rate charged will be 4.3 per cent for customers in negative equity and customers with mortgages equal to 91 per cent or more of the value of their home.
Permanent TSB said it will write to eligible customers about its new rates in the coming weeks.
Meanwhile, AIB cut its standard variable rate by a quarter of a percentage point to 3.9 per cent in May, with the change coming into effect in the last month. This came on top of an earlier quarter-point cut to its standard variable rate in December 2014.
“We keep our mortgage rates under review,” it said on Wednesday.
Bank of Ireland, which charges between 3.9 per cent and 4.5 per cent on its variable interest mortgages, also said it kept the pricing of all of its products under active review.
“Products – including mortgages – are priced to reflect the cost of funds to the Group, the estimated potential loan losses from the portfolio, recovering our costs including our staff and infrastructure costs, and the capital required to support the products,” the bank said.
Bank of Ireland’s statement also highlighted cuts to its fixed interest rates in May – the lender has been keen to promote the “certainty” offered by fixed-rate mortgages, which half of its new customers now choose.