The recent stakes update in the mortgage prices reveled that the minimum loan amount has been cut short.
The deal of Ulster Bank, 2.2% five-year fixed-rate is now active for mortgages of €250,000. Previously, it was a minimum of €300,000.
With the reduced loan amount, there will be many more homeowners who will be qualified for the rate.
It comes after mortgage lender Avant Money entered the market with fixed rates as low as 1.95%.
Karl Deeter, of Irish Mortgage Brokers, mentioned the move as a part of the mortgage war.
He also added that the trend in mortgage rates in Ireland is going to be downwards. “Avant Card changed the landscape and you saw very quickly AIB responded and now Ulster Bank has responded.” He said.
However, he also mentioned that a few mortgage owners do switch, so homeowners should start looking at rates on offer.
“We have 35,000 borrowers in this country who have walked past €30,000 in savings, according to the Central Bank, and over 100,000 borrowers who have walked past €10,000, which is €1billion in lost consumer spending. If you saw that amount in a carrier bag in the street you wouldn’t walk past it.” Mr Karl Deeter said.
He also said that, he does not believe many will match Avant’s 1.95% rate.
“Avant might be the best but their machine isn’t big enough and their processing isn’t fast enough for them to truly damage the larger banks, whereas if someone big does it.”
“The reduced rates are a welcome announcement for consumers with the lowest rate on offer by Ulster Bank set at 2.2%. The introduction by Avant Money of a sub 2% rate in September has meant others have been viewing their products and pricing.” Said Martina Hennessy, of online mortgage broker doddl.ie.
‘Competition in the market is always positive for the consumer. I would expect to see further announcements from some of the other mortgage lenders who have not reduced rates and continue to lend at fixed rates of 3%.’ Martina Hennessy added.
Homeowners can reduce their mortgage with lump sums without incurring a penalty, because Ulster Bank’s fixed rates allow for overpayment of up to 10% of loan outstanding each year during the fixed period.