LEADING mortgage lender Bank of Ireland has cut some of its short-term rates, but also increasing fixed rates for those who want to lock in for five years or more.
The bank has cut both the one and two-year fixed rates by 0.10pc to 2.9pc, effective from January 30.
This is the first time in recent years that Bank of Ireland mortgage rates have dropped below 3pc.
It follows a move last year by Ulster Bank to introduce a two-year fixed rate of as low as 2.3pc.
Bank of Ireland is also increasing its five-year and 10-year fixed rates, a move that reflects the fact that it expects European Central Bank rates to start moving up in the next year or so.
The interest rate for the bank’s five and 10-year rates is increasing by 0.20pc
The five-year fixed now will go to 3.2pc, the 10-year fixed is now 3.5pc for those with a loan to value up to 80pc, and 3.7pc above 80pc loan to value.
The new rates will apply to first-time borrowers, switchers and existing customers who are on variables. The bank has one of the highest variable rates in the market at 4.5pc.
The new rates will not impact on those already locked into a Bank of Ireland fixed rate.
Head of mortgages at the bank Brian Vaughan said nine out of 10 new owner occupier mortgage customers are opting for fixed rates.
The bank is also extending its 3pc cash-back offer until the end of this year.
Mr Vaughan said: “These new rates are available to new mortgage customers, to our existing mortgage customers on a variable rate and to customers coming to the end of a fixed rate period. Existing customers on a fixed rate will continue on their current rate until the end of their term.”
He said that up to now the bank had a flat 3pc rate across most of our fixed rates.
The changes are consistent with the medium term market expectations in relation to rates, he added.
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