AIB has announced two new shorter term green fixed mortgage products, which are now the banks lowest available mortgage rates.
The group said the offering was part of its commitment to sustainability and designed to help customers transition to a low carbon society.
The bank is offering a green three year fixed rate for homes with a building energy rating (BER) between A1 and A3 from 3 per cent, and a green two year fixed rate for homes with a BER between A1 and B3 from 3.15 per cent.
The new rates are available to new and existing customers from Saturday.
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A monthly repayment on a new €300,000 AIB green three year fixed rate mortgage with a loan to value of more than 80 per cent over a 25 year term will be €1,453. When compared to the AIB green five year fixed rate, there is an annual saving of over €380.
A monthly repayment on a new €300,000 AIB green two year fixed rate mortgage with a loan to value of more than 80 per cent over a 25 year term will be €1,477. When compared to the green five year fixed rate, there is an annual saving of over €95.
Switcher customers who meet the criteria and wish to avail of one of these fixed rates will also benefit from AIB’s €3,000 switcher cash offer.
Along with these new rates, AIB has recently extended its approval in principle period from six to 12 months, giving more time for customers to find and buy their new home.
The value of new mortgage lending by Irish lenders grew by 7 per cent year-on-year in the third quarter, which was the best performance since the start of 2023, according to new data published by Banking and Payments Federation Ireland on Friday.
Goodbody chief economist Dermot O’Leary said the “most notable trend” in the statistics is the rebound in re-mortgaging activity, which was up 28 per cent, ending six quarters of annual declines.
“Falling mortgage interest rates are likely to have helped in the quarter,” he said. “We expect this trend to continue given that some of those rolling off fixed rate deals have decided to temporarily move to variable rates in anticipation of further rate cuts.”
He said the value of drawdowns was “slightly ahead” of Goodbody’s estimates, triggering it to raise its forecast mortgage market for 2024 to €12.2 billion from €12.1 billion previously. The group is expecting growth of 8 per cent in 2025 to €13.2 billion.
On building, new dwelling completions rose 6 per cent in the third quarter, leaves housing supply year-to-date at 21,634, slightly below the 22,325 recorded this time last year.
Mr O’Leary said Goodbody is now forecasting that completions will amount to 34,000 in 2024, up from 32,500 last year, but below the Government’s prediction of 40,000.
“There has been a large increase in commencements in 2024 due to government incentives, suggesting that output will continue to grow over the coming years, but unlikely to the extent of the growth seen in the commencements,” he said.
AIB’s managing director of retail banking Geraldine Casey said the group’s new green rates “offer the security of a fixed rate combined with value”.
She also pointed out that customers who have retrofitted their homes may also qualify but not be aware of the fact.
According to the Sustainable Energy Authority of Ireland, more than 35,000 home upgrades have been completed so far in 2024 and almost 48,000 retrofit grants were made in 2023.
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