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| Bank of Ireland, College Green, Dublin
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Following the decision of the ECB to cut its benchmark rate today by 0.5% to 3.25%, several Irish banks have announced mortgage rate cuts.
AIB said before today's ECB rate cut announcement today, that AIB will pass on the full rate cut to mortgage customers - - excluding fixed rate mortgages.
Ulster Bank and First Active has today announced a reduction in mortgage interest rates.
Customers with mortgages on a Standard Variable Mortgage rate or a Flexible Mortgage Rates will see the interest rate on their account reduce by 0.5% from December 1st.
Today's reduction in the ECB rate by 0.5% will result in a 0.5% reduction in Tracker Mortgage rates from December 1st. Offset Flexible Mortgage rates which also reduce by 0.5%, with effect from
November 20th.
Bank of Ireland and ICS Building Society today confirmed that we will pass on the full ECB rate decrease of 0.5% to existing Standard Variable Rate (SVR) and Tracker Rate Mortgage customers and across our Variable LTV based product range.
Example of savings with rate reduction:
Bank of Ireland Variable LTV <50% (Savings based on a €250,000 mortgage over 25 years.)
| Old Rate |
Old APR |
New Rate |
New APR |
Monthly Saving |
Annual Saving |
| 5.00% |
5.10% |
4.50% |
4.60% |
71.26 |
855.12 |
Speaking about the reductions, Brendan Nevin, Director Consumer Banking, commented: "The decision by the European Central Bank to reduce its rate from 3.75% to 3.25% is a welcome move. This reduction, which we are passing on in full is good news for potential home buyers and demonstrates that Bank of Ireland and ICS Building Society are very much open for mortgage business. Together with our attractive lending criteria, a wide and varied product range and excellent service levels, at Bank of Ireland Group we are committed to providing our customers with the right products, advice and options to buy their home."
Bank of Scotland (Ireland) and its retail banking arm Halifax will pass on the full 0.50% ECB rate cut announced today to mortgage borrowers.
The bank has confirmed that the rate cut will be effective from 1st December 2008 and will be applied to all standard variable mortgage rates for new and existing customers.
|
SVR |
Old Gross |
Old APR |
New Gross |
New APR |
Monthly Savings |
Annual Savings |
|
Halifax |
4.90% |
5.01% |
4.40% |
4.49% |
€71.52 |
€858.24 |
|
BOSI |
5.25% |
5.38% |
4.75% |
4.85% |
€72.83 |
€873.96 |
"In "In total, today’s half-point interest rate reduction could save mortgage holders over €31,000 or more, which would actually exceed the value of the average SSIA account. Combined with the previous interest rate reduction announced in October, mortgage holders are now likely to be paying €180 less per month for their mortgages than they were 6 weeks ago," said Frank Conway, Director with Irish Mortgage Corporation.
Conway says that over the last 4 – 5 years, a significant percentage of homeowners have taken out tracker mortgages, either by way of purchasing a property, refinancing an existing mortgage or where a fixed rate loan rolled over to a tracker product.
He said in terms of savings, homeowners lucky enough to hold a tracker mortgage are in line to reap significant savings from the ECB announcement.
Monthly savings are calculated as follows:
€300,000 mortgage, 30-year term (1.25 % tracker)
Interest rate
Monthly payments
@ 5.0% €1, 610.46
@ 4.5% €1, 520.06 (50bps cut)
Monthly savings = €90.40
Annual savings = €1, 084.80
