Saturday, 3 February 2007

At last a mortgage price war

AIB yesterday announced cuts in their tracker mortgage rates, with rates as low as ECB + 0.45% for the first year and ECB + 0.6% for all subsequent years. This is seen as direct competition for National Irish Bank's recent competitive tracker offering.

As National Irish Bank don't distribute through mortgage brokers, the other lenders have to date held off cutting rates to see what effect on the market the NIB move would have. But AIB do distribute their mortgages through brokers, so I'd expect that AIB have started a rate war, as mortgage brokers are likely to be far less prone to inertia than the general public who National Irish Bank target.

Roll on some more rate cuts in the next few weeks...

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