Banking analyst with Merrion Capital, Ciaran Callaghan said all banks will be forced to decrease their variable rates.
Mr Callaghan, who correctly predicted the AIB rate reduction, said: "We are not surprised to see AIB announce these standard variable rate price reductions, bucking the trend over recent years, and expect other banks to follow suit in coming months."
He said that profit margins were so high on new mortgages that AIB rivals would have no choice but to lower rates.