AIB today announces it is reducing its one year fixed interest rate for first time buyer owner occupiers to a market leading interest rate of 2.49 per cent.
This rate will be available to first time buyer owner occupiers from this week on all mortgages sanctioned by March 31 and drawn down by June 30.
This offer, along with improved affordability in the housing market, strengthens the hand of first time buyers even further. Year on year, repayments for first time buyers are down by over €500 per month in the first year based on a combination of the drop in house prices and the reduction in AIB’s fixed rate pricing. This is a conservative estimate based on a published industry index which shows prices down c14 per cent year on year, while anecdotal evidence suggests that Irish house prices could in fact have fallen by as much as 30 per cent from their peak in 2006, meaning repayments have fallen by even more.
According to an AIB Global Treasury Economic Research report issued on February 5, dynamics are beginning to change in the Irish housing market and, while problems still remain, over time the reduced level of housing output and improved affordability conditions will help stabilise the market.
AIB has also announced the introduction of new loan to value variable rates for new owner occupier mortgages. The current standard variable rate for owner occupiers will no longer be available for new business from this date. Existing customers on standard variable rates will not be affected.
“We recognise the importance of the housing market to the wider economy and the impact that particularly first time buyer purchases have on the market,” said Pat Heelan, AIB regional director, Galway. “We will continue to lead the market in terms of aggressive pricing and are committed to increasing our capacity for mortgage lending in 2009. We are very much open for mortgage business and we continue to be consistent in our credit approach which has always focused on a customer’s repayment capacity, with a standard maximum loan to value of 92 per cent. Already in the first five weeks of this year we have helped over 1,000 customers with a mortgage. These figures speak for themselves — we are open for business.”
In addition to running an AIB national six-week mortgage promotion, AIB managers in Galway have decided to open two offices at Lynch's Castle and the Tuam Road from 11am to 3pm each Saturday for the duration of the campaign. The offices will be staffed by the managers, who are giving their time free during the campaign. Builders, auctioneers, and professional people are free to advertise in the two offices each Saturday if they wish.
