AIB has announced a 0.25% cut in its standard variable rate mortgage - the fifth rate reduction for existing customers in three years.

The bank said that a customer will see an annual repayment saving of €315 on a €200,000 mortgage over 25 years. 

The reduction in variable rates will benefit over 100,000 customers, it added.

AIB also said it was adding a new seven year fixed term rate of 3.5% to its product offering, which it claims is the most competitive on the Irish market.  

It is also making a range of reductions across its fixed rates, including a 0.5% reduction on the five year fixed rate. 

The fixed rate changes will come into effect from September 18, while the standard variable rate changes will apply from November 1.  

AIB Managing Director of Retail and Commercial Banking in Ireland, Robert Mulhall, said the bank's strategy, when conditions allow, is to pass on variable rate reductions to both new and existing customers.

"AIB's market leading variable rates provide the best of value, while our competitive fixed offerings allow new and existing customers to fix their rates if that’s what they are looking for," Mr Mulhall said.