The bank announced changes of between 0.1% and 0.9%, effective immediately for new customers and from February 1 for existing fixed-rate customers.
Customers looking for a five-year, fixed-rate mortgage with a loan-to-value (LTV) of less than 75% will be the greatest benefactors, with the bank offering a rate of 3.95%, as opposed to the 4.75% previously charged.
A mortgage with the same LTV over three years will carry an annual percentage rate (APR) of 3.85% — a cut of 0.65%, while for a two-year, fixed-rate loan with the same LTV the rate has dropped 0.45% to 3.80%.
The move follows a similar announcement by Permanent TSB (PTSB) which cut mortgage interest rates by between 0.35% and 0.42% for new customers. Rates for PTSB customers on trackers, fixed rate, or standard variable-rate mortgages, remained unchanged.
Both banks endured criticism yesterday for ignoring existing variable-rate customers, with the Irish Brokers Association, which welcomed the rate changes, claiming struggling customers are being left out in the cold.
“Existing variable-rate mortgage holders have been gouged for years now to boost the bank’s profitability and they continue to be left out in the cold by the banks. Many more are struggling and they need a lifeline in 2015,” said chief executive, Ciaran Phelan.
Fianna Fáil finance spokesperson Michael McGrath labelled the exclusion of existing variable-rate customers as “deeply unfair”.
“The fact that [mortgage rate] reductions will only be enjoyed by new customers further highlights the unfair way in which existing customers are treated by the main banks. The decision by Bank of Ireland and PTSB to restrict the lower rates to new customers means that the benefit that will be felt will be minimal,” said Mr McGrath.
In response, Bank of Ireland said its standard variable rates are constantly under review and that existing owner-occupier customers could now avail of its new-business fixed rates on receipt of an up-to-date property valuation.
A PTSB spokesperson said that more than two years ago the bank moved to managed variable-rate mortgage products, which it believes to be more equitable, while adding that its standard variable rates are very competitive.