KBC Bank has announced reductions of between 0.2% and 0.3% to its 3 and 5-year fixed mortgage rates, effective from March 1, 2020.
The move comes in response to recent rate reductions by rival Ulster Bank last month when it introduced Ireland's lowest rate of 2.20%.
It is also the second reduction of fixed mortgage rates by KBC Bank in recent months. The bank reduced its 10-year fixed from 3.75% to 3.20% for those with a 10% deposit, while those with a 40% deposit or more now get a rate of just 2.85%.
KBC Bank says the newly reduced rates will appeal to a broad range of customers and offer first time buyers, movers and switchers even better long-term value.
Its say, a customer with a €250,000 mortgage and a LTV of 85% who selects KBC's new five-year fixed rate of 2.5% will make an interest saving of €2,210 over the five years.
"We recorded new mortgage lending of €1,122 million in 2019, the highest since 2013," Conor McGowan, KBC Bank's Head of Mortgages, said. "In addition to this our market share increased to 11.8 percent in 2019 and our mortgage applications are up 11 percent, so we know that our competitive offering is resonating with consumers. With today’s announcement, we hope to build on this and appeal to new and existing homeowners who are looking for more value and choice from their mortgage."
Daragh Cassidy, Head of Communications at product comparison and consumer website bonkers.ie, said, "In the space of just a few weeks we've seen mortgage rate reductions from both Ulster Bank and KBC. This follows a pattern we saw last year by both banks and it really is the smaller banks that are driving most of the downward pressure on rates in Ireland now.
"This development is undoubtedly good news for mortgage holders who for too long have suffered with some of the highest rates in the Eurozone. The question now is whether the bigger banks like AIB and BOI will follow suit. My expectation is that they will as they’ll feel they have no choice."