AIB cuts four-year fixed mortgage rates

AIB has cut its four-year fixed mortgage rates by up to 0.35 per cent for loans exceeding €250,000, targeting properties lacking a B3 energy rating or higher, according to reporting. The immediate reductions apply to both new and existing customers across the country.

New Four-Year Fixed Tier Structure and Loan-to-Value Cuts

The updated pricing has distinct reductions based on loan-to-value (LTV) ratios. For borrowers with an LTV exceeding 80 per cent, the four-year fixed rate drops from 3.6 per cent down to 3.25 per cent. Customers holding an LTV between 50 and 80 per cent see their rate fall from 3.5 per cent to 3.2 per cent. Meanwhile, those with an LTV below 50 per cent qualify for a rate of 3.15 per cent, down from 3.4 per cent.

Data provided by AIB indicates that a customer taking out a new €350,000 four-year fixed rate mortgage with an LTV of 50 to 80 per cent over a 25-year term saves €55.52 per month, which totals €666.24 annually. This same scenario yields a total saving of €4,715.72 over the full 25-year term. Under these terms, monthly repayments drop from €1,750.82 to €1,695.30.

Context in the Broader Irish Mortgage Market

These rate adjustments arrive shortly after two separate 0.25 per cent interest rate increases by the European Central Bank over the preceding six months. Those ECB hikes directly impacted more than 100,000 tracker mortgage holders who faced immediate repayment increases. By contrast, fixed-rate demand remains exceptionally high. AIB reported that nearly nine in ten new customers have opted for fixed rates this year.

Recent figures from the Banking and Payments Federation Ireland show that the average new mortgage in Ireland reached €318,000 during the second quarter of the year. During that same period, first-time buyers borrowed an average of €326,000, while movers took out an average of €391,000. AIB’s newly adjusted rates are accessible to first-time buyers, home movers, and switchers, as well as existing variable-rate holders and those reaching the end of their current fixed-term agreements. added that switchers coming to AIB can also access a €3,000 cashback offer.

Bank Strategy and Customer Security Amid Rate Hikes

This round of reductions follows a prior set of cuts implemented in October of last year, when AIB lowered various non-green fixed rates by up to 0.65 per cent to benefit upwards of 10,000 people monthly. The bank stated that it continuously monitors market conditions to support borrowers as monetary policy changes.

We are committed to pricing our mortgages at a sustainable rate for our customers and the bank. And we continue to monitor the mortgage market and the needs of customers, making considered adjustments where appropriate.

Geraldine Casey, AIB Managing Director of Retail Bank