Lowest BoI mortgage rate is not available to its existing customers
Bank now offering new loan product to homes with any category of BER
Existing Bank of Ireland customers will not be able to benefit from the lender’s lowest mortgage rate, which it is offering to new customers.
This could see them miss out on savings of more than €700 a year.
The bank last week introduced a new home-loan product offering tiered discounts for homes that have any level of Building Energy Rating (BER). It said new and existing customers could qualify for this new EcoSaver Mortgage.
But existing customers will not be able to combine the new EcoSaver with what the bank calls its High-Value Mortgage. If they could, they would qualify for a mortgage rate as low as 3.6pc.
The bank offers lower interest on fixedrate mortgages for those borrowing more than €250,000.
But existing borrowers will not be able to avail of the High-Value Mortgage rates if they opt for the EcoSaver as the High-Value Mortgage is not available to existing customers. This means they will have to pay more than a new mortgage customer.
Earlier this month, AIB Group was accused of discriminating against mortgage customers by cutting green lending rates while leaving other rates untouched. AIB and its subsidiaries, EBS and Haven, reduced their green mortgage rates, but not other home-loan rates.
Last month, PTSB introduced a new three-year fixed rate for green mortgages, with rates from 3.8pc for new customers. However, existing PTSB customers coming off fixed rates will not be able to apply for the new green rate or the lower four-year fixed rate.
Green rate mortgages first came to the Irish market in 2019 and since then have been on offer from Bank of Ireland, Permanent TSB and AIB Group including Haven Mortgages and EBS.
Martina Hennessy, the managing director of brokerage Doddl.ie, said Bank of Ireland had now withdrawn its green rate mortgages in favour of an EcoSaver mortgage. This new product has 64 different rates depending on the fixed-term mortgage amount and BER.
“The product essentially allows for a discount on the BoI rates based on the energy rating,” she said. “The largest discount is 0.35 percentage points for A-rated homes, right down to 0.05 points discount on standard rates for a G energy rating. BER-exempt homes have no discount.”
The advantage of the Bank of Ireland product is that it is open to all mortgage applicants with a BER from A to G. But Ms Hennessy said the disadvantage was that the bank was offering its lowest high-value (greater than €250,000) mortgage with EcoSaver rates to new business customers.
“The high-value EcoSaver rate is not open to existing mortgage customers, meaning, right now, an A-rated mortgage holder with BoI with a mortgage of €250,000 or more cannot avail of their lowest 3.6pc rate and the best rate on offer would be 3.8pc.”
Ms Hennessy said for a mortgage customer with a €300,000 mortgage with 30 years remaining, the difference between these two rates would be €60 a month, or €720 a year.
She said Haven Mortgages was offering a €2,000 switcher package and reduced-document journey, making it easier for existing mortgage holders to switch to its green rate.
The broker said recent mortgage rate cuts by lenders meant the expectation now was that there would be more decreases over the coming months.
“A collective drop in rates across the lending market is not going to happen fast. However, we can expect to see lenders tweaking key rates to remain competitive as they continue to compete for market share.”
A Bank of Ireland spokesperson confirmed its EcoSaver combined with the High-Value Mortgage was for new customers only. “Our lowest EcoSaver fixed rate for existing customers with a BER A is 3.8pc, compared with 3.6pc for a new-business High-Value Mortgage without cash back.”
The bank said all existing customer rates were available to customers irrespective of remaining mortgage balance or current loan-to-value.
“A-rated mortgage holder with BoI with a mortgage of €250,000 or more cannot avail of their lowest 3.6pc rate”