AIB increases rates on some fixed-rate mortgages

AIB is increasing the rates on some of its fixed-rate mortgage products with homeowners being urgedto take advantage of historically low interest rates.

The bank said it has increased the fixed rates on its three, five and 10-yearofferings but not on its one and two-year products.

Director of the Irish Mortgage Corporation, Frank Conway said the announcement by AIB to increase rates is not a surprise and even with the most recent increases, they continue to have some of the best fixed-rate deals in the market.

“Interest rates in general continue to be very low and are unlikely to remain there indefinitely, particularly in light of some economies showing some signs of recovery.

“Homeowners who are currently contemplating fixing their mortgage rate should remember that current interest rates are not likely to be repeated for a long time to come,” he said.

AIB is increasing the rate on its three-year fixed from 3.1% to 3.19% and on its five-year from 3.69% to 3.86% and from 4.41% to 4.65% on its 10-year.

Director of the Mortgage Store, Kevin McNerney said AIB’s decision to increase the rates is good news for mortgage holders in the shorter term.

He said with rates currently at their lowest level there is really only one way they can go from here and that is up.

“However, that upward trend could be some months away, possibly even the end of next year, and the chance of there being a further cut before the increases start is very real.”

Mr McNerney said the fact that AIB has not increased its one or two year fixed rates indicates that it feels rates will remain at today’s level for some time to come.

“The fact that they have only increased their three, five and ten-year fixed rates all by less than 0.25% would suggest that even when rates do start to increase it will be at a gradual pace and certainly not at the rate we have seen them being cut by over the last nine months,” he said.