Banks bow to pressure and cut mortgage rates

THE main financial institutions, including AIB and Bank of Ireland, have finally reacted to pressure from politicians, businesses and customers by dropping their mortgage interest rates.

All the main lenders have now cut their variable mortgage rates, although AIB and First Active confirmed yesterday they were not passing on the full 0.5% cut made by the European Central Bank (ECB) last Thursday.

AIB announced it was reducing its variable mortgage rate by just 0.38%, while First Active is restricting the reduction in its standard variable rate for new customers to 0.46%.