AIB cuts rates on eco-friendly Green mortgages

AIB Cuts Interest Rates on Green Mortgages as Competition Heats Up

AIB has announced a significant cut to its interest rates on ‘green mortgages’ across all its brands, including EBS and Green Haven. The move comes as competition in the mortgage market heats up, with other lenders also making changes to attract environmentally conscious customers.

Starting from April 9, AIB will reduce green mortgage fixed rates by 0.2%, making the new rate available to both new and existing customers. To qualify for this product, mortgage customers must own a home with an energy rating of B3 or higher.

Green Mortgages

According to the bank, the new rate will result in annual savings of €387.36 on mortgage repayments. This applies to customers taking out a new €300,000 five-year green fixed-rate mortgage with a loan-to-value ratio of 50-80% over a 25-year term.

Despite the positive changes, green mortgages still make up a smaller portion of AIB’s loan book. In contrast, Permanent TSB (PTSB) saw green mortgage customers accounting for 30% of its total new mortgage lending last year.

PTSB recently introduced a new three-year fixed rate for new green mortgage customers, with rates ranging from 3.80% to 4.35% depending on the mortgage amount and loan-to-value ratio. The bank also reduced rates for new customers on four-year fixed-term mortgages, making it more attractive to first-time buyers in a volatile housing market.

As the European Central Bank prepares to meet to discuss monetary policy, market experts are anticipating interest rate reductions by June. This could provide relief to tracker mortgage customers, but the future remains uncertain for fixed and variable mortgage holders.

Stephen Hamilton, broker and managing director at Mortgage Line, warned that mortgages coming off fixed rates could see an increase in repayments. With potential changes on the horizon, customers will need to stay informed and consider their options carefully.