AIB to announce fixed rate cuts today

shweeney

Frequent Poster
Messages
272
worth switching from the 2.75% variable to the 3 year fixed I wonder? It doesn't look like they're going to do anything with the variable as all the competition in the market is on fixed rates. What would it cost to break out of the fixed if I later decided to switch?
 

sylvin

Registered User
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10
Is there any thought on whether the variable rates will start to change at all? Or if the fixed rates will change again in the next year enough to make people regret going for the 3 year fixed?
 

MacktheKnife

Registered User
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13
worth switching from the 2.75% variable to the 3 year fixed I wonder? It doesn't look like they're going to do anything with the variable as all the competition in the market is on fixed rates. What would it cost to break out of the fixed if I later decided to switch?
I would save €9 a month for the pleasure of being locked in.
I won’t even think of fixing until rates are below 2%.
 

RedOnion

Frequent Poster
Messages
4,597
Is there any thought on whether the variable rates will start to change at all? Or if the fixed rates will change again in the next year enough to make people regret going for the 3 year fixed?
This is entirely my personal opinion. I've absolutely no insight into what any bank is thinking regarding mortgage rates.

I don't think AIB will touch the lowest LTV variable rate. It's 2.75% and the lowest rate available. The market is competing on fixed rates solely now, but AIB get to use this in their marketing. However we might see a bit of downward movement in their higher LTV & SVR rates. But I do think 2.75% is going to be their floor.

As for fixed, across the market I think 2% will be a hard floor that's not going to be passed in the foreseeable future. We already have 2.2% & 2.3% rates available, with some cash back for new mortgages.

I think what we will see this year is the lowest rates being made available for longer periods as banks use flatter interest rate curves to lock in funding and customers for longer. With AIB we already see the same rates for 3 & 5 years, and these are lower than the 1 year rate. I think we'll see more of those across all the lenders and over longer periods.

In summary, I think we're more likely to see banks offering 2.75% over 10 years than sub 2.2% over 2 years.
 

sylvin

Registered User
Messages
10
This is entirely my personal opinion. I've absolutely no insight into what any bank is thinking regarding mortgage rates.

I don't think AIB will touch the lowest LTV variable rate. It's 2.75% and the lowest rate available. The market is competing on fixed rates solely now, but AIB get to use this in their marketing. However we might see a bit of downward movement in their higher LTV & SVR rates. But I do think 2.75% is going to be their floor.

As for fixed, across the market I think 2% will be a hard floor that's not going to be passed in the foreseeable future. We already have 2.2% & 2.3% rates available, with some cash back for new mortgages.

I think what we will see this year is the lowest rates being made available for longer periods as banks use flatter interest rate curves to lock in funding and customers for longer. With AIB we already see the same rates for 3 & 5 years, and these are lower than the 1 year rate. I think we'll see more of those across all the lenders and over longer periods.

In summary, I think we're more likely to see banks offering 2.75% over 10 years than sub 2.2% over 2 years.

Thanks for the reply. I'm currently on 2.95% variable with Haven so 2.55% for the new 3 year fixed could save even €45pm which is not to be sniffed at! I'm a bit traumatised though by fixed rates and dropping variable rates lol When I started mine in 2008 I was recommended by the broker to go with the 5 year fixed rate for stability which I did. Then, the rates drop happened and rates dropped multiple times during those 5 years! Looking back over this forum, the 3 year fixed rate was also dropped last year. I'd be happier with a 2 year fixed to avoid having to watch rates drop for too long and not being able to take advantage of them.....but going from 2.95% to 2.55% is tempting me!
 

2bmortgagefree

Registered User
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16
Does anyone know if rate reduction will apply to EBS mortgages? I see Haven mentioned but no reference to EBS.
 

RedOnion

Frequent Poster
Messages
4,597
Does anyone know if rate reduction will apply to EBS mortgages? I see Haven mentioned but no reference to EBS.
No, this reduction doesn't apply to EBS. They have their own pricing proposition, using cashback.
That's not saying they might not have a different announcement anytime soon.
 

Brendan Burgess

Founder
Messages
41,415
Am I reading these rates correctly? AIB is not at the races when it comes to the 3 year rate. KBC is much better value for 3 years and Ulster for 2 years

They are comparable for 5 year fixes.

So these rates are only of interest to existing AIB customers who won't or can't switch to a better value lender?

Max LTVFixed termRateCash backNotes
KBC60%2 year2.25%€3,000 for switchers onlyCurrent a/c customers
KBC60%3 year2.25%€3,000 for switchers onlyCurrent a/c customers
KBC90%2 year2.3%€3,000 for switchers onlyCurrent a/c customers
KBC90%3 year2.35%€3,000 for switchers onlyCurrent a/c customers
Ulster90% 2 year FTB only2.3%€1,5003.5 times LTI
Ulster80%2 years2.3%€1,500
Ulster90%2 years2.45%€1,500Non FTBs
KBC60%5 year2.4%€3,000 for switchers onlyCurrent a/c customers
KBC80%5 year2.45%€3,000 for switchers onlyCurrent a/c customers
KBC90%5 year2.5%€3,000 for switchers onlyCurrent a/c customers
KBC90%1 year2.5%€3,000 for switchers only
F.I.60%3 years2.35%
F.I.60%5 years2.4%
F.I.80%3 years2.4%
F.I.80%5 years2.45%
F.I.90%3 year2.65%
AIB90%3 or 5 years2.55%€2,000 for switchers only
ICS60%3 year2.55%
ICS90%3 years2.65%
Ulster90%4 years FTBs only2.6%€1,500
Ulster80%4 years2.6%€1,500
UlsterExceptions4 years2.75%€1,500
Ulster90%5 years FTB2.6%
Ulster80%5 years2.6%
UlsterExceptions5 years2.75%
ICS60%5 years2.6%
BoIAll1 or 2 year2.9%2% + 1% extra after 5 years
BoIAll3 or 5 year3.0%2% + 1% extra after 5 years
ICS90%5 years2.65%
EBSAll1,2,3,4 or 5 year fixed2.9%2% + 1% extra after 5 years
 

Brendan Burgess

Founder
Messages
41,415
So if you are on AIB's 90% LTV variable rate of 3.15%, you can now switch to the 3 year fixed for 2.55% which is a saving of 0.6%

But you could switch to KBC and get a rate of 2.25% or 2.3% which would be a saving of up to 0.9%.

Brendan
 

Itchy

Frequent Poster
Messages
367
But you could switch to KBC and get a rate of 2.25% or 2.3% which would be a saving of up to 0.9%.
Brendan
Can I ask why AIB customers would not switch to KBC or Ulster? I can understand effort vs. reward, customer service, neg equity issues etc. But the conditions are in the customers favour here. The opportunity costs of not moving are huge up to 1% pa, the medium term outlook for rates is stagnation (look at any recent bank/insurance company annual report), you can get a low fixed rate for 2 years so if rates do drop you won't be overtaken by the change like the people who fixed for 5/10 years a year or two ago, overpayment facility on the lowest fixed rate available is available. I would hazard a guess that most customers needs would be accommodated by these conditions.

A mobile customer base could really shift the dial in Ireland if people got their act together...
 
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Itchy

Frequent Poster
Messages
367
I can see the mortgage market going the way of the PHI market with high segmentation and a multitude of plans and combinations of terms. That way the banks will keep the aggregate rate hovering above 2 across the market.
 

Brendan Burgess

Founder
Messages
41,415
I have been asked for a few comments by journalists on this and these are the points I am making.

  • Irish borrowers are still paying about twice the rates being charged in other eurozone countries
  • It is very interesting that the banks who give 2% cash back have not cut their rates. They are attracting new customers with cash back and not good rates. Their existing customers are stuck on the higher rates.
  • The AIB rate cuts do not make them attractive for new business e.g.
  • AIB 3 year rate 2.55%
  • KBC 2 years : 2.3%
  • Ulster Bank First Time Buyers 2 years :2.3%
  • However, they are good for existing AIB customers who are too lazy to switch lender
  • For example, many AIB customers are paying 3.15% variable – they should fix for three years at 2.55% for a saving of 0.6% or €100 a month on a €200 mortgage
  • But they would be better again switching to KBC or Ulster Bank
  • What is the outlook for dealing with higher rates in Ireland?
  • Both Michael McGrath and Pearse Doherty have introduced leglislation in the last Dáil to control mortgage rates .
  • I would call for cash backs to be banned so that lenders must compete on rates and not gimmicks
  • I would also call for banks to be forced to offer existing customers the rates and deals on offer to new customers. That would make sure that existing customers benefit from rate cuts
  • There is a potentially serious problems with vulture funds. They can hike up the rates to 10% in the morning if they so wish. There is nothing to stop them.
 

Brendan Burgess

Founder
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41,415
Hi Techhead

Interesting point, so I have started a separate thread

 

BourbonWithIce

Registered User
Messages
53
I don't understand why you include BOI in your table and exclude PTSB. BOI rates are higher. Both offer cashback. PTSB have a 3 year fixed at 2.70% and it's not mentioned above whereas you include BOI 3 years fixed at 3.00%.
 

Brendan Burgess

Founder
Messages
41,415
Hi Bourbon

I explain that in the original thread. I would advise anyone against dealing with ptsb unless they have no choice. They have a history of treating their customers very badly. And even now, they don't allow existing customers the same deals as new customers.
 
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