Mortgage rate war heats up as KBC cut to save €1k a year
THE mortgage rate war between the banks saw a new cut yesterday that will save homeowners around €1,000 a year.
KBC became the fourth bank to cut its rates in the past three months.
Homeowners campaigner David Hall, of the Irish Mortgage Holders’ Organisation, said the cuts ‘exposed the lie’ that the number of people in arrears was preventing the banks from cutting rates.
A borrower with a €300,000 30-year mortgage on a fiveyear fixed rate with KBC will see from their rate drop from 3.35% to 2.80% and their monthly repayments cut from almost €1,314 to just over €1,227, saving them €86.75 a month or €1,041 a year.
KBC Bank director Fergal O’Riagain said: ‘Our new rates mean greater choice for firsttime buyers and greater value for movers and switchers while allowing them to have certainty of repayments and also save money.
‘Combined with our current account discount and €3,000 switcher support, this entire package makes KBC the obvi- ous choice in the Irish market today for mortgages. We would encourage any customers, new or existing, to talk to us about getting the best value for their mortgage.’ The move comes in response to a recent reduction in rates by KBC rival Ulster Bank.
Among the reductions, KBC has reduced its one-year fixed rate for first-time buyers from 2.90% to 2.50% making it the market leader. Its three-year fixed rate has also been reduced from 3.00% to 2.65%.
The latest changes at KBC mean a first-time buyer borrowing €250,000 over 30 years would save almost €75 a month by availing of its new five-year rate.
Meanwhile, KBC’s threeyear fixed rate for movers and switchers, or first-time buyers with over 20% deposit, has been reduced from 2.90% to 2.60% while its five-year rate on these terms has been reduced from 3.05% to 2.65%.
The new rates will be available to both new and existing KBC mortgage customers and come into effect from September 3. All rates incorporate the 0.20% discount available only to KBC current account customers.
Price comparison website bonkers.ie spokesman Daragh Cassidy said: ‘The question now is not if, but when, AIB and the rest of the competition will follow suit.
‘There’s now a huge variation in interest rates and cashback incentives across all the different lenders, so my advice to first-time buyers is to do your research, shop around early and find out who’s offering the best deal.
‘If you already have a mortgage, then look into switching. Many lenders now have dedicated switch teams in place to make the process as easy as possible so it often won’t be as much hassle as you think it might,’ Mr Cassidy added.
Irish Mortgage Holders’ Organisation chief David Hall said that he hoped the cuts would spark further cuts from other banks, as Irish homeowners pay the highest average mortgage rates in the EU.
The number of people in arrears in the first three months of the year was almost 72,000 – almost one in 10 mortgages.
There are huge rate variations ‘Look into switching’