Bank cuts rate for home loans

A NEW mortgage interest rate cut announced today will save the average borrower almost €500 a year.

PTSB is cutting its fixed-rate mortgage products for new accounts by up to 0.3%, which means a new three-year fixed rate for ‘green’ mortgages will start from 3.80%.

Experts believe the cut will start a rate war between the main banks as interest rates on international money markets are falling sharply.

The European Central Bank (ECB) is expected to start cutting its main interest rate in the next few months as inflation falls back to its 2% target.

The reduction will mean a saving of up to €44 per month for a borrower fixing a mortgage of €250,000 over a 30-year term.

The new four-year fixed rates will come into effect from today and will be priced at 3.80%, 3.90% or 4.05%, depending on the loan-to-value ratio of the mortgage.

The bank announced changes to its three- and four-year fixed rate products for new customers with ‘significant reductions to the relevant interest rates’. It is the bank’s second reduction to the four-year fixed rate since December, when a reduction of 0.40% was passed on.

A spokesman said: ‘Today’s announcement builds on the bank’s already successful five-year fixed-rate green mortgage product, which is available to new and existing customers and accounted for 30% of the bank’s total new mortgage lending in 2023.’

Campaigner David Hall of the Irish Mortgage Holders Organisation said: ‘This, I hope, is the start of the banks beating the living hell out of each other when it comes to rates.

‘Not competition – war. Let’s hope it’s a war in the most rate-friendly and bloodiest way humanly possible.’

And mortgage broker Karl Deeter added: ‘The money markets are doing their thing and the banks are going to respond.’