Bank of Ireland has launched a €1 billion find for lending to first-time home buyers. The bank says it is offering a one-year fixed rate of 2.45% under the scheme, which it says will benefit around 4,000 people.

Read more on what mortgage offers are available from banks

The move is part of the bank's commitments under the Government's recapitalisation plan. Under that plan, announced last week, AIB and Bank of Ireland must provide an additional 30% capacity for lending to first-time buyers.

Bank of Ireland says the current difficult economic conditions have made first-time buyers nervous about getting into the property market. 'This new fund sends a clear message to all first time buyers that Bank of Ireland is very much open for mortgage business,' it says.

AIB introduced a one-year fixed rate of 2.49% for first-time buyers last week.