AIB and Bank of Ireland have said they will keep their variable mortgage rates under review, following Permanent TSB’s decision to cut rates and a Taoiseach Enda Kenny index that the October budget could be used to “deal with the banks” on the matter.
After a series of meetings between lenders and Finance Minister Michael Noonan, banks had until July 1 to offer cheaper mortgage loans to their customers on pain of sanctions.
In response, Permanent TSB said it would allow approximately 70,000 standard variable rate mortgage customers of 4.5 percent to switch to new rates that will start from 3.7 percent.
The new rates will vary based on the amount owed by customers and the current value of their home, and the highest rate charged will be 4.3% for customers with negative equity and customers with a mortgage. equal to or greater than 91% of their home’s value.
The permanent TSB said it would write to eligible customers about its new rates in the coming weeks.
Meanwhile, AIB cut its standard variable rate by a quarter of a percentage point to 3.9% in May, with the change taking effect last month. This was in addition to a previous quarter point cut in its standard variable rate in December 2014.
“We are keeping our mortgage rates under review,” he said Wednesday.
Bank of Ireland, which charges between 3.9% and 4.5% on its variable interest mortgages, also said it keeps pricing on all of its products under active scrutiny.
“The products – including mortgages – are priced to reflect the cost of funds to the Group, the estimated potential losses on portfolio loans, the recovery of our costs, including our personnel and infrastructure costs, and the capital required to support the products, âthe bank said. .
The Bank of Ireland statement also highlighted the cuts to its fixed interest rates in May – the lender was keen to promote the “security” offered by fixed rate mortgages, which half of its new customers now choose .
Mr Kenny told DÃ¡il he expected banks to cut interest rates following the warning issued by Mr Noonan. But he also noted that three banks had already introduced measures that would drop variable rates below 4%.
âWe have a budget coming up in October,â Kenny said. âThere are opportunities for the Minister to deal with the banks if this is the case and if necessary.
However, Sinn FÃ©in finance spokesman Pearse Doherty said the deadline had been “largely ignored” and it was clear the government was “unwilling to stand up to the banks” on the interest rate.
He described his handling of the matter over the past four years as “a cruel failure”.