AIB Group has announced it is cutting its non-green fixed rate mortgages by up to 0.75 percentage points and interest rates for its one- and two-year fixed-term deposit accounts by 0.25 points and 0.5 points, respectively.

The mortgage rate reductions will be available to new and existing customers of AIB, EBS and Haven from 13 May, and the group said the cuts could benefit "a large number" of consumers.

AIB's two-year fixed rate for non-green mortgages will come down by 0.75 points, and all other non-green fixed rate mortgages will be reduced by 0.5 points, excluding the high-value four-year fixed rate.

The reductions are in line with interest rate cuts by the European Central Bank, and will primarily assist customers coming to the end of their fixed term at historically lower rates. AIB previously made a number of cuts to its green mortgage rates last year.

With the reductions, a monthly repayment on a new €300,000 AIB two-year fixed rate mortgage with a loan to value ration of 50-80% over a 25-year term will be €1,557.37, as opposed to €1,682.35 previously.

That represents a saving of €124.98 per month, €1499.76 a year, or €5,177.47 over the 25-year term.

“AIB takes a balanced and measured approach to interest rate changes," said Geraldine Casey, managing director of retail banking at AIB. "These significant reductions to our non-Green fixed mortgage rates could benefit tens of thousands of customers by saving them money each month, in some cases by up to c. €125.

"We understand that some customers are buying a home in areas where Green properties are limited and also that some customers are coming to the end of a previous fixed rate mortgage, taken out at a time where the interest rate environment was much lower than it is now. These new rates will provide significant support to those customers.

"These reductions, coupled with previously announced reductions to our Green rate mortgages and our competitive variable rates demonstrate our commitment to supporting customers and providing them with the best value on their home buying journey."

Outside of the one- and two-year fixed-term deposit accounts, the rates for all other AIB savings accounts will remain unchanged. The changes will also come into effect on 13 May.

Since June 2024, the ECB has cut rates seven times by a cumulative 1.75% while AIB has reduced fixed-term deposit rates once, by 0.25 points in January.

"In line with the falling interest rate environment, we are reducing two of our Fixed Term Deposit accounts while keeping all other savings accounts unchanged," said Casey. 

"AIB continues to offer some of the most competitive savings rates in the Irish market, especially for customers who require instant access on their savings.”

Photo: Geraldine Casey. (Pic: Supplied)