AIB has made a reduction of up to 0.35 per cent on its four-year fixed rate for mortgages over €250,000.
The reduction, available to those whose homes don’t have a building energy rating of B3 or higher, has been put in place with immediate effect for new and existing customers.
The rate will apply to customers with a minimum mortgage balance of €250,000 and a loan-to-value ratio of more than 80 per cent.
For those with an LTV of more than 80 per cent, the rate will fall from 3.6 per cent to 3.25 per cent.
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Rates for mortgage holders who have an LTV of 50-80 per cent have fallen from 3.5 per cent to 3.2 per cent, while those with an LTV of below 50 per cent can avail of a rate of 3.15 per cent, down from 3.4 per cent.
Data provided by AIB said customers on a new €350,000 four-year fixed-rate mortgage, with an LTV of 50-80 per cent over a 25-year term, can save up to €55.52 per month, or €666.24 a year, under the new terms.
It added monthly repayments based on this example would fall from €1,750.82 to €1,695.30.
Based on data from the Banking and Payments Federation Ireland, new mortgages in Ireland were on average €318,000 in the second quarter of this year.
In the period, the average first-time buyer mortgage was €326,000 and the average mover mortgage was €391,000.
In October last year, AIB also reduced a number of its non-green fixed mortgage rates by up to 0.65 per cent, which it estimated could benefit more than 10,000 people each month.
The latest cuts by AIB have come in the wake of two interest rate increases by the European Central Bank in the past six months, which led to more than 100,000 people who hold tracker mortgage facing immediate increases to their repayments.
The new rates are available to new customers buying their first home, or borrowers moving home or switching their mortgage to AIB.
Existing customers on variable rates and those coming to the end of their fixed-rate period can also avail of the new terms.
A statement from AIB said the bank had observed customers increasingly seeking out fixed rates, with almost nine in 10 new customers opting for a fixed rate this year.
AIB managing director of retail banking Geraldine Casey said this fixed-rate reduction would offer security for customers amid the rate hikes.
“We are committed to pricing our mortgages at a sustainable rate for our customers and the bank. And we continue to monitor the mortgage market and the needs of customers, making considered adjustments where appropriate,” she said.
