AIB cuts all rates by 0.25% - SVR now 3.65%

Brendan Burgess

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AIB Group announces SVR reduction

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AIB Group today (Friday 7 th August) announces a cut of 0.25% in its Standard Variable Rate and Loan to Value mortgage rates across AIB, EBS and Haven for its owner occupier customers. This is the third rate reduction in ten months and will apply to new and existing customers with effect from 1 st October, 2015.

AIB’s Chief Executive, Bernard Byrne, said, “We are confirming the latest reduction in mortgage interest rates in tandem with the bank’s announcement of its Half-Yearly Financial Results that strongly reflect our improved financial performance. We committed to keep mortgage rates under constant review and to reduce these rates for both new and existing customers if and when AIB’s funding conditions allowed. Fortunately, we are again in a position to do so today.’’

The latest move benefits approx. 156,000 mortgage account holders, leading to very significant annual savings. As an example, Owner Occupier customers with a €200,000 mortgage on a 25 year term will save an additional €325 per annum following this announcement. The combined annual savings from the three reductions announced by AIB in the last 10 months is €988 for AIB, and €1,166 for EBS/ Haven on an annualised basis.

Customers may also choose to move to the Banks’ 1 year fixed rate option at 3.50%. For existing SVR customers this will result in an additional saving of €193 per annum. The Bank continues to offer competitively priced fixed rates of 3.50% for 1 year, 3.65% for three years, and 3.80% for a five years fixed.

New and existing Owner Occupier customers will benefit from the 0.25% reduction across all AIB, EBS and Haven SVR and LTV rates.
 
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This is great news for SVR borrowers, I'd thought there was nothing further going to happen, but it does seem the pressure has worked on AIB. I wonder what BofI will do.
 
This is great news for SVR borrowers, I'd thought there was nothing further going to happen, but it does seem the pressure has worked on AIB. I wonder what BofI will do.

They have not ruled out further reductions. Brings into the light PTSB offering trackers customers very poor margins of 3.25% over ECB. How long before the tracker with margin of 3.25% is on par with what AIB are offering to variable rate loans. The difference is just .35% as of today depending on LTV.
 
I presume (or would at least like to think) that AIB's cuts are at least in part in response to the FMR campaign so on that basis well done Brendan and everybody else involved.
Maybe others affected (or not) might be more motivated to join in if they see that such a campaign can yield tangible results.
 
This is good news,

I was wondering does any bank hold a black mark against you if your switch to a different bank.
Say one moves from KBC to AIB, then in X number of years KBC reduce their rates and you want to avail of a better rate. Will KBC welcome you back as a brand new customer
or would they think that you will just leave again in another year or so when a better deal comes along?
 
No bank will refuse business regardless of past as long as you were paying your obligations. Besides moving usually carries a minimum term so it's still good for them.
 
I wonder if AIB considers switchers with LTV>80 but not in NE, i.e., is that 80% threshold necessary for switching? Hard to say from their tables and calculators. I would love to defect from the BOI hassle notwithstanding.
 
I wonder if AIB considers switchers with LTV>80 but not in NE, i.e., is that 80% threshold necessary for switching? Hard to say from their tables and calculators. I would love to defect from the BOI hassle notwithstanding.
I was just wondering the same thing. But to get away from PTSB...
 
Why is AIB's 80%+LTV rate than their SVR?
Are 80%+LTV customers precluded from switching to SVR or something?
Are AIB LTV customers stuck forever with/in the initial LTV bracket?
 
I rang up AIB today. I am not in negative equity and I have no arrears but my LTV would be greater than 80%.

They said they could take me on if :
no arrears and if your ltv does not come in at 80% you need to make up the 20% with a deposit
 
Why is AIB's 80%+LTV rate than their SVR?
Are 80%+LTV customers precluded from switching to SVR or something?
Are AIB LTV customers stuck forever with/in the initial LTV bracket?

According to their website their SVR product is now discontinued.

All current variable rate products on offer are categorised by LTV.

On this basis I would imagine it is not possible to switch to their SVR.

Not certain if they allow customers to move LTV brackets as they pay down their mortgage and/or their house value increases, would guess no but would like to be corrected on this!
 
Thanks, alexandra123. Well, then their indicative table is misleading: it clearly states in the bottom row that LTV variable (whatever its difference from the SVR) for LTV>80% is 3.75% for New Customers. For the 20% deposit to get to 80% LTV as a requirement for new customers to be valid, that bottom row in the table above should state LTV<80% of 3.75%, not LTV>80%, is it not? Either that, or the cell for for New Customers should be empty there. I don't get it.

Oh, I may be wrong - New column stands for New rate, not new customers I guess. Then the wait for the elusive 80% threshold continues into the future, no switching then :(
 
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According to their website their SVR product is now discontinued.

All current variable rate products on offer are categorised by LTV.

On this basis I would imagine it is not possible to switch to their SVR.

Not certain if they allow customers to move LTV brackets as they pay down their mortgage and/or their house value increases, would guess no but would like to be corrected on this!
Thanks for the info.
So the headlines about SVR being 3.65% isn't of much relevance to anybody on the 80%+LTV rate.
Always a catch...
Anybody know the proportions on AIB customers on the different classes of rate - SVR, 80%+LTV, 50-80%LTV, < 50%LTV?
And/or when they discontinued the SVR?
 
Does that mean that certain existing AIB borrowers (on the now discontinued SVR) are being treated more favourably than certain new borrowers with the same LTV and LTI.

That's a first!:)
 
There is still discrepancy in what they told a forum member and their own guidelines:

personal.aib.ie/our-products/mortgages/switcher-mortgage

Are you Eligible?
Switching is available for all Principal Private Residence (PDH) mortgage holders in Ireland who have a mortgage with any other Mortgage provider.
We will require that your mortgage repayments are not in arrears, also that your mortgage is not in negative equity, this is when the balance of your current mortgage is greater that the current market value.


It does not say anything you need to comply with the 80% threshold, only that it is not in NE, and their switcher calculator did not "eject" me.
 
I see nothing at all odd in treating existing customers well. What is odd is the way in which some lenders fleece existing customers more than they fleece new customers.

Brendan

Well, banks are commercial organisations whose primary duty is to maximise the return to their shareholders (which happens to be the taxpayer in the case of AIB). Increasing rates charged to existing borrowers is constrained by the fact that borrowers can either refinance their loans with competitors or increasing rates too much will simply increase default rates.

It seems odd to me that a bank would ever charge new borrowers a higher interest rate than existing borrowers in exactly the same financial circumstances.
 
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