Bank of Ireland cuts fixed rates

The bank is reducing its five-year fixed rate by 0.2pc to 3pc and its 10-year rate by a similar amount to 3.3pc for those whose property is worth at least 20pc more than the value of the loan.


Davys claims that they are reducing the fixed rates for non-cash back products, but I have not seen the details

Bank of Ireland (BOI) has announced several changes to its suite of mortgage products. It has introduced the first green mortgage product in Ireland, and increased investment to support a more environmentally-friendly economy should provide significant opportunities in the coming years. The reductions in rates are reflective of the lower rate environment, while introducing a non-cash-back product is likely aimed at the broker market where cash-back is not a material segment.

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They are now offering a high value mortgage (over 400k) at 2.5% fixed for 5 years, with no cashback. Seems to be an attempt to compete with Ulster Bank's high value offering, though at least that still gives 1500 cash back.

No more than the Ulster variable cuts last week, this doesn't seem like it will have much impact? 3.3% fixed seems poor value, considering KBC have a 5 year fixed at 2.6%. Perhaps I'm missing something?

Thanks warrior

High Value Mortgage Fixed Interest Rate
Are you borrowing €400,000 or more for your homeowner mortgage? If so, you can choose our High Value Mortgage fixed interest rate.

This is a five-year fixed rate of 2.5% (APRC from 3.3%). Once the five year fixed rate ends you will be able to choose from our normal interest rate options available to existing customers.

If you get our High Value mortgage fixed rate, you won’t get a cashback offer. You might find that our High Value Mortgage fixed interest rate suits you better than a standard fixed rate with our cashback offer. We’ll help you compare these.

So someone borrowing €400k could choose
5 years at 3% with 3% cash back - In simple terms 12% in total over the 5 years

Or 5 years at 2.5% or 12.5%

I don't see the point?

Surely the 2% cash back up-front trumps this for the first 4 years. And if you switch to another product or lender within the 4 years, the cash-back is even better.

The only person who would benefit slightly from this would be someone who fixes for 5 years and switches in the last year. But that would be stupid as they would be getting the 1% at the end of the last year.

Brendan

username123 said:

3.3% fixed seems poor value,

Click to expand...

That is the APR which is meaningless for fixed rates.

Brendan

So this is purely a marketing gimmick.

They can now advertise fixed rates as low as 2.3%*

If you are a new customer
Borrowing over €400,000
to buy an A rated house
who can't do basic maths.

Brendan

But founder of the Askaboutmoney.com website Brendan Burgess accused the bank of a marketing gimmick.

"This is purely a marketing gimmick. They can now advertise fixed rates as low as 2.3pc," he said.

"You would only go for this if you are a new customer, borrowing over €400,000 to buy an A-rated house and you can't do basic maths."

I have had a few friends get new mortgages (first time buyers) recently. None of them went for lowest rate despite my explanations. All went for cashback plus higher rate with their current primary bank.
Would an awareness campaign that people don't have to get their mortgage from their primary bank make any difference to this?