AIB announces cut to mortgage interest rates 

Move, due to come into effect next month, will see some customers save up to €125 a month

The rate cuts will come into effect on May 13. 

AIB Group has announced a cut to its fixed rate mortgages, due to come into effect on May 13, that could see customers save up to €125 a month.

The move comes following the European Central Bank's decision last month to cut interest rates by a further 0.25%. 

AIB said its two year non-green fixed rate mortgages would see a reduction of up to 0.75% — available to new and existing customers — while all other non-green fixed rate mortgages will reduce by 0.5%, excluding the “High Value Four-Year” fixed rate.

AIB Group also encompasses EBS and Haven. AIB gave the example of their two-year fixed rate mortgage with a loan-to-value ratio of less than 50%, reducing from 4.45% to 3.7% from May 13. 

“The reductions are in line with the falling interest rate environment,” the bank said.

AIB said a monthly repayment on a new €300,000 AIB two-year fixed rate mortgage, with a loan-to-value of 50-80% over a 25-year term, would be €1,557.37. The previous monthly repayment would have been €1,682.35, representing a saving of €124.98 a month based on a rate reduction from 4.6% to 3.85%.

With the reduction in interest rates on mortgages, AIB has also announced a cut to interest rates offered on some savings deposits.

The bank’s one- and two-year fixed term deposit accounts will reduce by 0.25% and 0.5% respectively, effective May 13. All other savings and deposit rates remain unchanged.

AIB’s managing director of retail banking Geraldine Casey said “these significant reductions to our non-green fixed mortgage rates could benefit tens of thousands of customers by saving them money each month”.

“These new rates will provide significant support to those customers.” 

According to the latest data from the Central Bank, Ireland has the fifth highest interest rates in the eurozone.