AIB recently revealed two new short-term green fixed mortgage offerings, now the lowest mortgage rates available from the bank. The products are in line with the bank’s dedication to sustainability and aim to aid customers in adapting to a low-carbon society.
The bank’s two offers are; a green fixed rate for three years for homes rated between A1 and A3 on the building energy rating (BER) scale from 3 per cent, and a green two year fixed rate for homes rated between A1 and B3 at 3.15 per cent.
From Saturday, these rates have been available to both new and existing customers. For example, a new £300,000 three-year AIB green fixed rate mortgage, with a loan to value above 80% over 25 years, would result in a monthly repayment of €1,453. This results in an annual saving of over €380 when compared to the five-year green fixed rate.
Customers able to switch and fitting the criteria could also take advantage of these fixed-rated offers in addition to benefiting from the bank’s €3,000 switcher cash offer.
In addition, AIB recently extended its approval in principle period from six months to a whole year, healing house hunters to take their time.
New data from the Banking and Payments Federation Ireland, published on Friday, shows a 7% year-on-year growth in new mortgage lending by Irish lenders in Q3. It’s the best performance since the beginning of 2023.
Goodbody’s chief economist, Dermot O’Leary, highlighted the resurgence of re-mortgaging activity, up 28%, marking an end to a year and a half of yearly reductions, as a dominant trend in the report. He commented that lowering mortgage interest rates likely contributed to the quarter’s activity, predicting this trend will persist.
He explained that the amount of drawdowns had surpassed Goodbody’s initial expectations slightly, prompting an adjustment of the predicted mortgage market for 2024 from €12.1 billion to €12.2 billion. The group foresees an 8% expansion in 2025, valued at €13.2 billion.
As for construction, there was a 6% growth in finalisation of new homes in the third quarter, taking the yearly housing supply up to 21,634, a bit under the 22,325 recorded at the same time the previous year. Stated by Mr O’Leary, the expectation now is for the completion figures to reach 34,000 in 2024, increasing from 32,500 of the past year, yet falling short of the government’s expectation of 40,000.
O’Leary noted the significant surge in commencements in 2024 owing to the government-initiated incentives hinting that this development might continue to rise, but unlikely to match the increase seen in commencements.
Geraldine Casey, the managing director of retail banking at AIB expressed that the group’s new green rates provide a mix of a fixed rate and value. She also placed emphasis in drawing attention to the fact that homeowners who have engaged in retrofitting their properties may be eligible, but may not be fully aware of that yet.
The Sustainable Energy Authority of Ireland reports show over 35,000 home renovations have been accomplished as of 2024, and almost 48,000 retrofit grants were awarded in 2023.