AIB may cut interest rates for some struggling homeowners

Monday 24 March 2014 22.34
AIB is planning to introduce a temporary rate cut in the second quarter of the year
AIB is planning to introduce a temporary rate cut in the second quarter of the year

AIB is considering slashing interest rates for some mortgage holders who are in arrears.

The bank is examining the option of reducing interest rates for some homeowners as low as 0.5%.

It is expected it would introduce the measure in the second quarter of this year and follows a similar move by Ulster Bank.

It is understood the AIB homeowners would benefit from the measure for up to five years.

It would apply to some customers in arrears who are currently on standard variable rate mortgages or tracker mortgages.

AIB has also written to 476 customers last week offering them split mortgages, which include writing off some debt.

It is understood about 2,500 to 3,000 mortgage accounts are likely to benefit from write offs.

This will represent about 10% of the total number of the bank's customers in arrears.

Customers will only be offered reduced rate mortgages or split loans after other options have been exhausted.