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In a significant development for the Irish mortgage market, Bank of Ireland has announced a 0.5% reduction across all its fixed-rate mortgage products, effective from Tuesday, 19th November 2024. This move positions the bank as a competitive force in the market, closely aligning its rates with those offered by rival AIB for homes with high energy-efficiency ratings. Let’s break down what this means for homeowners and first-time buyers.

The New Rates in Detail

The reduction applies to a wide range of fixed-rate options for new and existing customers. Key highlights include:

  • Four-year fixed rate for BER A properties: Dropping to 3.1%, nearly matching AIB’s three-year fixed rate of 3%, introduced last month for similarly rated properties.
  • Four-year fixed rate for BER exempt properties: Reduced to 3.45%, providing more flexibility for homes without an energy-efficiency rating.
  • 10-year fixed rate for BER exempt properties: Falling to 4.55%, offering long-term stability for owner-occupiers.

For a typical mortgage of €300,000, this translates to an annual saving of approximately €1,000 compared to previous rates.

A Strategic Response to Market Trends

The rate cut reflects broader market trends as the European Central Bank (ECB) continues to signal further rate reductions. Economists expect the ECB to implement a fourth rate cut next month as inflation comes under control. Since early June, the ECB has already reduced rates by 0.75%.

This shift in monetary policy has led analysts to lower their 2025 earnings forecasts for banks, driven by falling interest rates. Bank of Ireland’s decision not only aligns with these macroeconomic shifts but also positions it to attract environmentally conscious borrowers seeking energy-efficient homes.

The Benefits for Homebuyers

This rate cut provides an excellent opportunity for buyers and homeowners looking to refinance. Whether you’re stepping onto the property ladder or seeking to reduce monthly repayments, these changes could unlock significant savings.

With Irish mortgage rates now averaging 4.08% in September—the lowest in over a year—there’s a growing opportunity to secure a favourable deal.

Additional Changes to Deposit Products

Bank of Ireland is also revamping its deposit products alongside these mortgage changes. A new 18-month fixed-term deposit account will offer an Annual Equivalent Rate (AER) of 2.98%, replacing the previous 24-month option with a slightly lower AER.

How to Take Advantage of These Changes

Navigating mortgage options can feel overwhelming, but with these new rates, it’s an ideal time to assess your options. Whether you’re a first-time buyer, a seasoned homeowner, or considering switching mortgages, the right advice can help you make the most of the current market.

Get Personalised Advice on Your Mortgage

If you’re considering taking advantage of these rate cuts, we can help. At All Financials, our experienced mortgage advisors are here to guide you through the process. From comparing the latest rates to securing the best deal, we’ll ensure your journey is smooth and stress-free.

Contact us today to start exploring your options or book a free consultation with one of our experts.

Author: Fran Cooke