KBC Bank has become the latest lender to announce that it's cutting interest rates on fixed rate mortgages.

The Belgian bank is cutting its 2 and 10-year fixed rates here by between 0.2 and 0.55%.

That would see its 10-year fixed rate being reduced from 3.75% to 3.2% for those with a 10% deposit, while those with a 40% deposit or more will get a rate of just 2.85%.

The move to cut follows a decision by Bank of Ireland to reverse an increase in interest rates that it introduced earlier this year.

AIB also cut rates in April followed by Ulster Bank in June.

The European Central Bank is widely expected to cut interest rates further at its next meeting in September.

"We know that our customers are looking for greater value and certainty in their repayments over longer periods and our new pricing reflects these needs. We would encourage existing or potential homeowners to come and talk to us about getting the best value for their mortgage," Fergal O'Riagain, KBC Bank’s Director of Products, said.

The price comparison website, bonkers.ie, said the announcement generated some welcome competition in the 10-year fixed-rate market.

It says KBC now lays claim to the lowest rate on the market at 2.25%, fixed over two years for first time buyers with a deposit of 40%.