Haven, an AIB subsidiary, lowered its four-year “green mortgage” fixed rate to 2% and lowered its standard three-year fixed rate to 2.35%.
Both rates will be cut by 0.15 percentage points from Tuesday. The green mortgage rate is available to customers whose homes have a BER rating of B3 or higher, regardless of the loan-to-value (LTV) ratio. Haven launched the Green Mortgage in 2020.
The standard three-year rate has been reduced from 2.55% to 2.35% for existing and new customers.
“Haven now offers the most competitive green mortgage on the market, available to all new and existing customers, regardless of their loan to value,” said Kieran Tansey, Managing Director of Haven.
Based on the average mortgage taken out last year – €242,000 – over 20 years, the new green mortgage rate would represent monthly repayments of €1,222. The monthly payments on the standard rate of 2.35% for the same mortgage would be €1,262.
The new cuts follow Haven’s cuts to its seven- and 10-year fixed mortgage rates three months ago.
Avant and Finance Ireland have also cut their mortgage rates in recent weeks, moves that coincide with the exit of KBC and Ulster Bank from the market.
In December Finance Ireland announced it would cut its 10, 15 and 20 year fixed rates by up to 15 basis points and also introduce a 25 year mortgage.
incentives
Avant Money has cut rates on its fixed mortgages covering three, four, five, seven and 10 years for customers who reach a certain LTV threshold. The company’s cheapest mortgage is 1.95% for a three to seven year fixed rate mortgage on an LTV ratio of less than 60%.
Both lenders have also introduced cash back incentives for mortgage changers, covering up to €1,500. Haven is also offering €5,000 cashback to first-time buyers, money changers, movers and holiday home buyers who meet certain criteria or €2,000 to cover the costs of transferring mortgages to Haven.
The incentives come as customers of Ulster Bank and KBC consider their mortgage options, with both lenders set to exit the Irish market.
But other mortgage companies have warned that a rate hike could be on the way as inflationary pressures continue. Fergal McGrath, chief executive of Dilosk, a non-bank lender that offers home loans under the ICS brand, told The Irish Times Inside Business podcast that while rate hikes are not currently on the cards, they cannot be excluded.
Irish consumer price inflation hit 5.5% in December, its highest level in two decades. The Bank of England has already hiked rates in the UK, while the Federal Reserve has signaled at least three rate hikes for this year. To date, the European Central Bank, which sets rates for eurozone countries, has not signaled any hikes.
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