Bank of Ireland cuts all fixed mortgage rates by 0.5%

The ECB has cut rates by a cumulative 0.75% since June with a further reduction of 0.25% forecasted at the Governing Council's next meeting

The lender is also introducing a new 1-year fixed-rate product with rates starting at 3.3% for mortgages of €250,000 and over, which will be available from November 26. Picture Colin Keegan, Collins Dublin

Bank of Ireland is cutting its fixed mortgage rates by 0.5% for new and existing customers and for all homes with a Building Energy Rating from A to G. 

The reduction means that a 4-year fixed rate is available from 3.1% depending on a home's energy rating, representing an annual saving of €1,000 on a €300,000 mortgage when compared to the previous 4-year fixed rates. The cut takes effect from today.

The lender is also introducing a new 1-year fixed-rate product with rates starting at 3.3% for mortgages of €250,000 and over, which will be available from November 26. 

Irish banks have come under increased pressure to lower interest rates in recent months in response to several rate cuts from the European Central Bank (ECB). 

In October, the regulator embarked of back-to-back cuts for the first time in 13 years, saying inflation in the euro zone was increasingly under control.

Speaking on the rate reductions, Alan Hartley, Director of Homebuying at Bank of Ireland, said: “Offering value to our customers is important so this 0.50% cut is being applied to our full suite of fixed rate products. 

"These reduced rates are available to all new and existing customers from today and they apply all the way up and down the BER scale, not just to those homes with the best energy ratings.”

Bank of Ireland is also making two changes to its deposit offering from today. The lender is introducing a new 18-month Advantage Fixed Term Deposit Account with an AER of 2.98% which will replace its 24-month fixed-term deposit with an AER of 2.96%.

Since June, the ECB has cut rates by a cumulative 0.75%, with a further reduction of 0.25% forecasted at the Governing Council's next meeting in December.

In addition, figures released by the Central Bank this month showed that Irish mortgage rates fell to their lowest level in over a year in September, easing to 4.08% from 4.11% in the previous month.