Interest rate cuts of up to 0.45 percentage points will be introduced across the three-year and five-year fixed rate products.
The change is Finance Ireland’s first mortgage rate cut since the European Central Bank (ECB) began raising benchmark interest rates in July 2022, and reflects the decline in market-funded rates in recent weeks. are doing.
However, the floating rate that mortgage holders take advantage of when they exit their fixed rate will not be reduced.
Just one month after the previous increase was announced, the fluctuation range was raised by 0.25 percentage points in June last year.
This move puts the variable between 6.25% and 6.65% depending on the value of the loan.
As a result, Finance Ireland’s variable interest rate is the highest it has been in decades, excluding rates paid by vulture funds.
The Irish Financial Services Authority today announced that it will continue to review interest rates with the aim of passing on the benefits of lower market-funded rates to customers and bringing more competition to the Irish mortgage market.
Finance Ireland is also launching a new seven-year fixed rate product with interest rates starting at 5.35% for customers with loan-to-value (LTV) below 60%.
A spokesperson for the Irish Financial Services Authority said: “The mortgage rate reductions announced today demonstrate our commitment to providing our customers with the benefit of lower market funding rates and increased competition in the market.”
“Irish consumers need more competition and choice and we will continue to review our prices to make our services as competitive and attractive as possible.”
The new lower interest rate and new 7-year fixed rate will apply to drawdowns made from Thursday 22nd February onwards.
Michael Dowling, a mortgage broker at Dowling Financial in Dublin, said Finance Ireland’s rate cut was welcome.
But he said the new interest rates offered by Finance Ireland were not competitive. The cheapest equivalents are nearly 2 percent better on average.
Meanwhile, rival non-bank lender ICS announced less stringent lending standards for those seeking or switching mortgages.
The changes include increasing salary ranges for first-time buyers and increasing loan consideration amounts for those switching.
ICS Mortgages has also enhanced its public sector mortgage products to now consider three salary levels in addition to basic salary in its eligibility criteria. All changes take effect immediately.
Loan-to-value for first-time buyers is now four times their salary, up from 2.5 times previously.