It was announced today that Ulster Bank has introduced a new five-year fixed rate of just 2.20%, the lowest rate now on offer in Ireland.
The rate will be available to first-time buyers, home movers and switchers who take out a mortgage of €300,000 or more and who have at least a 20% deposit or 20% equity in their home. The bank has also become the latest lender to offer Irish mortgage holders the choice of a fixed rate over 10 years.
Up until recently very few lenders offered the option of a fixed rate for longer than five or seven years. But Ulster Bank now joins Haven, KBC, Bank of Ireland and AIB in offering mortgage customers the choice of a fixed rate over 10 years.
Ulster Bank will offer a market-leading 10-year rate of 3.15% to first-time buyers and 2.95% to home movers and switchers or first-time buyers with a 20% deposit. Slightly higher rates will apply if someone is seeking an exemption to the Central Bank’s loan-to-income rules. Ulster Bank will start offering the new rates from 17th January.
Price comparison and switching website, bonkes.ie, say fixed rates in Ireland are now lower than most variable rates, which is highly unusual in comparison to most other countries.
Goodbody Stockbrokers say Ulster Bank is also quite heavily involved in the broker channel, so its new offering will also likely impinge on the other banks more dependent on this distribution channel, like PTSB and KBC.
Ulster Bank does not offer cashbacks, but Goodbody say even looking at the new rates on a net basis (net of cashback over period of the fix) for the other banks, the new Ulster Bank rates look attractive.