AIB, EBS cut variable interest rates

Knuttell

Registered User
Messages
893
THOUSANDS of homeowners on variable mortgage rates are set to benefit after AIB, EBS and Haven cut their home-loan rates.

The lenders, which are all part of the AIB Group, have reduced the variable rate by 0.25pc.
It is the first time variable rates have been cut in years, despite the European Central Bank rate being cut twice this year. The ECB rate is now at a record low of just 0.15pc.

New and existing borrowers with AIB, EBS and Haven gain from the rate cuts.

Some 146,000 existing homeowners will set their payments go down, the bank said.

The move will mean savings of €330 a year for a family with an AIB variable mortgage of €200,000 over 25 years, the bank said.

http://www.independent.ie/business/...s-as-aib-ebs-cut-interest-rates-30705276.html
 
Indeed,it really got a lot of traction from this site,I wonder though how much this has to do with AIB trying to steal competitors existing business,thing will dry up quickly in the new year with the CBs new lending criteria.
 
My summary of AIB rates (Haven and EBS are a bit higher)

New Standard Variable Rate owner occupiers |4.15%
LTV >80%| 4.25%
LTV 50% - 80%| 4.05%
LTV <50%|3.85%
AIB, EBS and Haven reduce mortgage interest rates
· New variable rates come in to effect from 1 December 2014 for new and existing customers
· Reduction of 0.25% in standard variable rate for AIB, EBS and Haven customers
· New market leading fixed rates to come into effect from 4 November 2014
AIB Group today (Thursday 30th October) announces a number of reductions to its variable and fixed interest rates for owner occupier mortgages. These include a reduction of 0.25% for Standard Variable Rate (SVR) customers and the introduction of new lower Loan to Value (LTV) and fixed rates across AIB, EBS and Haven.
The move benefits approx. 146,000 existing mortgage account holders; for example customers with a €200,000 mortgage will save up to €334 per annum, based on a 25 year term.
AIB Group is also introducing new market-leading fixed mortgage rates across all three brands. These include 3.80% in respect of its three year fixed rate and 3.90% for its five year fixed-rate mortgages.
New and existing customers will benefit from reduced pricing across all LTV variable rates. AIB and Haven are cutting all LTV mortgage rates by 0.24%, while EBS is reducing all its LTV rates by 0.25%. AIB and Haven customers with an LTV of 50% or less will see their interest rate drop to 3.85%, while EBS customers will see it fall to 3.80%.
Bernard Byrne, Director of Personal, Business and Corporate Banking, said “AIB is now in a position to reduce variable mortgage interest rates due to the bank’s underlying positive performance and funding cost reductions. The introduction of the Bank’s new fixed rate pricing will provide better value and certainty for customers.’’
-See also tables below-




Notes to Editors:
1. Revised variable rates come in to effect from 1 December 2014 for new and existing customers with fixed rates to come into effect from 4 November 2014
2. Existing fixed-rate customers will not be impacted until their current fixed-rate term expires. However, they will have the option to fix again once their current term expires and will be in a position to avail of the new fixed rates at that point.
3. This reduction is not linked to the European Central Bank base interest rate and will therefore not apply to tracker mortgage holders.
4. EBS and Haven form part of AIB Group.
5. Individual SVR Customers will be advised of the changes in writing.
6. The changes announced apply to the Republic of Ireland only (AIB, EBS and Haven)
 

Attachments

  • AIB press release.docx
    46.6 KB · Views: 415
That certainly cheered me up - I can hardly believe it. For once good news for variable rate mortgage holders:)
 
AIB customers with an SVR mortgage will be paying 4.15% irrespective of their LTV. The type of mortgage you have is determined by the type you took out initially. If the initial LTV was > 80%, that is the rate you will be paying now, even if you have since reduced your LTV to <50%.

Of course a Bank of Ireland customer with an LTV of <50% could switch to AIB and get the 3.85% rate.

Update: Apparently AIB customers can submit a revised valuation and will qualify for the lower LTV rate
 
good news. I wonder is it worth fixing for 5 years though at 3.9% as AIB say their variable rate is not influenced by ECB lending rates now any time someone asks them why up until now they have not reduced the variable rate when the ECB reduces its rate.
 
good news. I wonder is it worth fixing for 5 years though at 3.9% as AIB say their variable rate is not influenced by ECB lending rates .

I am holding out in the hope of a new foreign bank opening here offering tracker mortgages...maybe deluded but they would have them queuing round the block and could cherry pick all day and night.
 
AIB customers with an SVR mortgage will be paying 4.15% irrespective of their LTV. The type of mortgage you have is determined by the type you took out initially. If the initial LTV was > 80%, that is the rate you will be paying now, even if you have since reduced your LTV to <50%.

That's incorrect - it is possible to move between LTV bands by submitting an up to date valuation of your property. I did this at the end of 2013 on a mortgage with AIB.
 
The cut in the 5 year rate presumably signals further cuts in the variable rate in the near future?
 
The "doubting Thomas" in me is thinking - is this AIB
(a) pre-empting / intending a further reduction in variable rates down the line and tempting borrowers to lock in to fixed rates in advance of lower variable rate ? or
(b) enticing borrowers away from competitor mortgage providers ? or
(c) a combination of both above ?
While accepting that AIB or any other lender will always strategically adjust interest rates with a view to maximising return and market share , the prospect of fixing for 3 years @3.80% is very tempting ! Is this an AIB Trojan horse or as a result of muddling through the stress tests unscathed ?
 
Great to see AIB group doing the decent thing.
They were first to make a concession after getting the thumbs up from ECB stress tests.

Hopefully other banks such as bank of ....... will be able to do the decent thing soon.

Any bank charging more than 5% is plain punitive
And hammering those customers who are currently bailing same banks out with property tax, income tax and universal social charge.

I mean where is the justice in handing out loans then when economy goes tits up the consumer gets zero concession? And is charged 5.65%

I still am hopeful that bank of ........ will reduce the 5.65% rate they are charging on investment property.


Maybe once again I am being overly optimistic?
Like when I took the loan in first place
 
And while I'm at it: what pressure can be brought on those privately owned banks?

ECB rates:

June 8 2006 2.75%
August 3 2006 3.0%
October 5 2006 3.25%
December 7 2006 3.5%
March 8 2007 3.75%
June 6 2007 4.0%
July 3 2008 4.25%
October 8 2008 3.75%
November 6 2008 3.25%
December 4 2008 2.50%
January 15 2009 2.00%
March 5 2009 1.50%
April 2 2009 1.25%
May 7 2009 1.0%
April 7 2011 1.25%
July 7 2011 1.5%
November 3 2011 1.25%
December 8 2011 1.0%
July 5 2012 0.75%
May 2 2013 0.50%
November 7 2013 0.25%
June 5 2014 0.15%
September 4 2014 0.05%


Bank of .... rates:

2012 One of the largest mortgage lenders during the boom, Bank of Ireland will now see its standard-variable rate jump to 4.3pc for existing mortgage holdersfrom October 5. This is around the average variable rate in the market.

Then in 2013 the SVR jumped to 4.5%

Directly opposite to the ECB rate: so as the tracker profits decline they are compensated by SVR accounts. That to me is anti-competitive.

Presumably BOI can and do borrow from ECB at almost nothing: so they're making a profit either way: just scalping those unfortunates who are on SVR with BOI

Also, if a property is in negative equity and cannot switch: that is another example of anti-competitiveness because the customer is *stuck* with the lender and the lender can do whatever they want.

Is there no pressure can be brought against this privately owned organisation?

Are there too few people on SVR to matter?
Is it too much to expect the central bank to actually stand up for the consumer???

Are they simply pawns of the political masters who want strong banks, strong economy at any cost (and bow down to the european masters)
 
SVR is a standard variable rate of interest, LTV is the ratio of loan amount to the value of your home. They are two different things. Most mortgage interest rates are calculated using loan to value ratio, because obviously the more you borrow the higher the risk for the bank, so they will charge higher interest rates.
 
Will this have any influence on Danske Bank variable rates (since there is speculation in some papers that other banks will follow suit)? Or is there any incentive for them to keep irish customers if they just want to exit the market I.e. Just force people to change to another bank altogether to get a better rate, and otherwise keep it at its present rate?
 
Well done & thanks to Brendan for highlighting this issue.

I can't see Danske voluntarily doing a thing to adjust rates downwards - they want to get out of Ireland. Having people switch & remortgage would suit them.
 
Back
Top