Update - I wrote this long and thoughtful response and then found out that BoI has dropped its 2% cash back clawback.
Brendan
The first thing to ask here is why anyone is bothering with Bank of Ireland?
EBS gives 2% cash back without any clawback. Their variable rates are lower, so it's clear that you should go with EBS if they approve you for the amount of the mortgage you want.
Here are EBS's rates:
The equivalent rates in the Eurozone are around 1.5% lower. So when rates are way out of kilter, they should fall.
There are a few reasons why rates should fall towards Eurozone levels over the coming months and years
- It is expected that Frank Mortgages will enter the market - although we have been expecting this for almost a year now
- The Fianna Fáil bill to control mortgage rates may cause the Central Bank and the banks to take action to make the bill unnecessary.
- Individuals can bring their LTV below 80% and so can switch to a cheaper lender.
Bank of Ireland
It is bizarre that the Fixed Rates are below the variable rates at a time when the ECB rate is unlikely to fall much below 0%.
Why are three year fixes priced lower than 1 year fixes? If you put money on deposit, you get higher rates the longer you fix.
From their website
It seems to me that they have pitched their variable rates so high because they know that the vast majority of their existing customers just won't bother going to the hassle of switching.
If they want a cut, they can fix their rate. And then they are tied in to BoI for the duration of the fix. And probably longer as most people just don't bother switching.
Brendan