In a surprise move, the country’s largest lender has hiked its mortgage rates for the second time in just six weeks.
If it feels like it was only yesterday that AIB announced a mortgage rate hike, that’s because it kind of was…
Since July the European Central Bank (ECB) has raised its interest rates from 0% to 2% to combat runaway inflation. The main Irish banks were slow to pass on the rate hikes initially but in October AIB was the first to move when it hiked all its fixed rates by 0.5 of a percentage point. And although more hikes were expected over the coming months, it wasn’t expected that AIB would move again quite so soon.
However the country's largest lender has announced that it’s hiking all its fixed rates again by another half a percentage point.
Fixed rates at AIB's subsidiaries EBS and Haven will also increase by the same amount.
As in October, variable rates will remain unchanged for now. And it means that for the first time in years, AIB’s variable rates will now be cheaper than its fixed rates. Though this is normal in most countries.
Tracker customers won’t see any change either from this announcement - but they’ve already seen their rates go up by two percentage points since July and will likely see their repayments go up again in December when the ECB is likely to raise its main lending rate from 2% to 2.50% at least.
Existing fixed-rate customers obviously won’t see a change to their repayments either (for now at least). However they'll be faced with much higher rate options when they come to the end of their current fixed-rate agreement.
New AIB rates
Here’s a look at the new fixed rates from AIB which are effective immediately.
And remember that you can compare interest rates and offers across all lenders using our free mortgage calculator.
|
AIB Fixed Rates |
<=50% |
>50% <= 80% |
>80% |
|
Green Mortgage (5 Year Fixed)* |
3.10% |
3.15% |
3.25% |
|
High Value (4 Year Fixed)** |
3.15% |
3.20% |
3.30% |
|
1-2 Years |
3.95% |
4.05% |
4.15% |
|
3 Years |
3.35% |
3.45% |
3.55% |
|
4 Years |
3.65% |
3.75% |
3.85% |
|
5 Years |
3.35% |
3.45% |
3.55% |
|
7 Years |
3.95% |
4.05% |
4.15% |
|
10 Years |
4.10% |
4.20% |
4.30% |
*for homes with a BER of B3 or better
**for mortgages above €250,000
What should I do if I'm in the middle of applying for a mortgage?
If you’re in the middle of applying for a mortgage you still have time.
If you draw down your mortgage before 16th January 2023 you can avail of the old rates. But remember that most lenders close for several days over Christmas so you may not have as much time as you think.
What will it cost?
How much the rate change affects you will depend on the size of the loan you're taking out and the term.
However a first-time buyer borrowing €300,000 over 30 years will now pay around €75 to €80 extra a month. This is on top of the extra €75 to €80 you’d be paying as a result of the previous rate hike.
All told, it means forking out close to €2,000 extra a year. Ouch...
New deposit account
In slightly better news, on 30th November AIB is launching its new 1-year Fixed Term Deposit account which is offering 0.50% interest for customers with balances of more than €15,000. This is an increase on the previously announced rate of 0.25%.
But with inflation currently at over 9%, this isn't much to shout about but it means our short-lived experience with negative interest rates is a thing of the past.
Compare mortgage rates on bonkers.ie
If you're a first-time buyer, a home mover, or are looking to switch your mortgage to a better rate, you can compare mortgage interest rates and incentives across all lenders in Ireland in just seconds with our mortgage calculator.
And when you find the right mortgage for you, you’ll be able to complete your mortgage journey with us through our mortgage broker service.
Our mortgage broker service is fully digital and paper-free meaning you can do it all online from the comfort of your home.
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