EBS cuts fixed mortgage rates for new and existing customers

Recent figures from the Central Bank of Ireland revealed that Irish borrowers are still paying much high mortgage rates than our European counterparts.

The average rate on new mortgage drawdowns in Ireland, including both fixed and variable agreements, is around 3.15%. But the euro area equivalent is just 1.80%.

Despite the relatively high rates we pay here, the last few months have delivered some overdue positive news to prospective first-time buyers.

In late March, Ulster Bank reduced a range of rates and in April, both KBC and Permanent TSB did likewise.

And now, EBS has joined the emerging mortgage rate war by significantly reducing its fixed rates for new and existing borrowers.

What are EBS’ new mortgage rates?

EBS has cut its 1, 2, 3, 4 and 5-year fixed rates for first-time buyers to 3.00%, which makes it one of the most competitive banks offering fixed-rate mortgages in the Irish market at the moment.

The bank had previously charged a rate of 3.15% for its 1, 2 and 3-year fixed rate products, and 3.25% for its 4 and 5-year products.

While a rate cut of 0.25% may not sound very exciting in isolation, it can add up to significant savings over the lifetime of a loan.

Let’s look at an example to illustrate this.

Say you’re a first-time buyer hoping to borrow €270,000 to purchase a property valued at €300,000. At EBS’ previous 5-year fixed rate of 3.25%, you would have had a monthly repayment of about €1,531.

However, at the bank’s new rate of 3.00%, the same mortgage will cost €1,497 per month, which is a saving of €34 a month, or €408 a year. And over a 20 or 30-year mortgage, that can really add up.

EBS has also extended its 2% cashback offer until December 31st 2018. With this bonus, a customer borrowing €270,000 will get €5,400 back in cash at the time of drawdown.

Which bank has the best fixed rates for first-time buyers?

EBS’s new fixed rates are among the most competitive available in the Irish market.

Bank of Ireland also offers a 3.00% rate for 1, 2, 3 and 5-year fixed rates, while KBC offers a 2.90% fixed rate for a 1-year term to its existing current account holders.

Meanwhile, Ulster Bank offers a 2.90% fixed rate for 3 and 5-year terms, and a 2.85% for a 4-year term to its existing current account holders.

Here’s an overview of the best 3-year fixed rates currently available:

*Available to current account holders only

Can existing EBS customers avail of the new rates?

EBS’s new 3.00% fixed rates are available to the lender’s existing borrowers. However, customers who are still committed to a fixed term may have to pay a breakage fee to switch to one of the new, lower rates.

We spoke to EBS about this and were told that some existing customers won’t have to pay any breakage fees at all, while other may have to pay fees of over €1,000.

If you’re an existing fixed-rate EBS customer, you should get in touch with the lender to see what penalty fee - if any - you would be subject to pay.

Welcome news for borrowers

The emerging mortgage rate war is good news for Irish borrowers, many of whom have been paying very high rates for years.

The fact that four banks have cut rates in the space of just two months is an indicator that there is growing competition in the market, which is ultimately a good thing for borrowers.

The recent flurry of cuts makes now a very good time for first-time buyers and existing mortgage customers to compare rates - which is easy to do with our Mortgage Comparison page - and consider their options.