Competition in the Irish mortgage market continues to intensify with Bank of Ireland now offering a rate as low as 3.10%.
Bank of Ireland (BOI) is the latest lender to cut its mortgage rates.
Effective immediately, one of the country's biggest lenders is cutting all its fixed rates by 0.50 percentage points, with a rate as low as 3.10% now available.
However the bank’s variable rates remain unchanged at 4.15%.
The move comes in response to several cuts in interest rates by the European Central Bank (ECB) since June, which have put downward pressure on mortgage rates. Despite this, rates with most lenders are still significantly above where they were only a few years ago. In 2022, BOI was offering a green rate as low as 1.90% for example.
But with the ECB likely to continue to lower rates over the coming months, more rate cuts from BOI and other lenders are possible in the medium term.
What are Bank of Ireland's new rates?
Earlier in the year BOI announced that it was completely redesigning how it prices its fixed mortgage rates.
Previously, like most lenders, BOI set its rates based largely on a buyer's loan-to-value (LTV) ratio, meaning those with bigger deposits or more equity in their homes were charged lower rates.
Now BOI bases its fixed rates on the Building Energy Rating (BER) of the property being bought.
There's a base rate offered to all customers and then BOI applies a sliding scale discount based on the exact energy rating of the property. The discount ranges from 0.05 percentage points on a property with a BER of G to a 0.35 percentage point discount on properties with an A rating.
Here's a look at how BOI's new fixed rates stack up (all of which come with up to 3% cashback). So if you were to take out a two-year fixed rate with BOI you'd get a rate of 4.00% if buying a home with an E BER and a rate of 3.80% if buying a home with an A rating, regardless of the size of your deposit.
|
No BER/BER Exempt |
G |
F |
E |
D |
C |
B |
A |
|
|
Rate type/Discount |
0.00% |
-0.05% |
-0.10% |
-0.15% |
-0.20% |
-0.25% |
-0.30% |
-0.35% |
|
2-year fixed rate |
4.15% |
4.10% |
4.05% |
4.00% |
3.95% |
3.90% |
3.85% |
3.80% |
|
3-year fixed rate |
4.25% |
4.20% |
4.15% |
4.10% |
4.05% |
4.00% |
3.95% |
3.90% |
|
5-year fixed rate |
4.25% |
4.20% |
4.15% |
4.10% |
4.05% |
4.00% |
3.95% |
3.90% |
|
10-year fixed rate |
4.55% |
4.50% |
4.45% |
4.40% |
4.35% |
4.30% |
4.25% |
4.20% |
BOI also has a set of other fixed rates that it offers customers taking out a 'high-value' mortgage of €250,000 or more.
These rates are among the lowest in the market but don't come with cashback.
|
No BER/BER Exempt |
G |
F |
E |
D |
C |
B |
A |
|
|
Rate type/Discount |
0.00% |
-0.05% |
-0.10% |
-0.15% |
-0.20% |
-0.25% |
-0.30% |
-0.35% |
|
1-year high-value fixed rate |
3.65% |
3.60% |
3.55% |
3.50% |
3.45% |
3.40% |
3.35% |
3.30% |
|
4-year high-value fixed rate |
3.45% |
3.40% |
3.35% |
3.30% |
3.25% |
3.20% |
3.15% |
3.10% |
|
5-year high-value fixed rate |
3.75% |
3.70% |
3.65% |
3.60% |
3.55% |
3.50% |
3.45% |
3.40% |
|
7-year high-value fixed rate |
3.80% |
3.75% |
3.70% |
3.65% |
3.60% |
3.55% |
3.50% |
3.45% |
Who are the rates available to?
The new rates are available to first-time buyers, movers and switchers.
If you're an existing BOI customer you can also move to one of its EcoSaver rates but the rates for existing customers are slightly higher than the ones listed above.
Offering value to our customers is important so this 0.50% cut is being applied to our full suite of fixed rate products. These reduced rates are available to all new and existing customers from today and they apply all the way up and down the BER scale, not just to those homes with the best energy ratings.
Alan Hartley, Director of Homebuying at Bank of Ireland
Rewards for retrofits
A great feature of BOI's Ecosaver rates is that if you carry out any renovations which improve the energy efficiency of your home (and increase the BER) you can apply for a bigger discount on your mortgage rate.
You can make smaller step-by-step changes over time, or get everything done at once with a full retrofit. The new eligible discount will be applied upon the completion of your project. Just supply an updated BER certificate to BOI.
So for example, if you buy a home with a G BER today you'll only get a 0.05 percentage point discount on your mortgage rate. But if you upgrade to a B rating in a few years' time, you can apply for a 0.30 point discount instead. And it doesn't matter if you're in the middle of your original fixed rate - you can still apply for the bigger discount whenever you've upgraded the BER of your home.
Just note that the discount will be based off the rates that applied at the time you took out your original mortgage and not on the rates BOI is offering at the time you complete your retrofit (which may be higher or lower than at present).
Get your mortgage with bonkers.ie
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