The interest rates on all new local authority mortgages have been cut by 0.25%.

The change will apply to new home loans issued from today onwards under the Rebuilding Ireland Home Loan (RIHL).

It will bring the rate on mortgages of up to 25 years to 2.495%, while those loans of between 25 and 30 years will see their interest rate fall to 2.745%.

The changes are being made as part of a pledge contained in the Government's Housing for All plan launched last week.

"This will make repayments more affordable and assist borrowers in securing a long-term fixed rate mortgage to purchase a home of their own," said Minister for Housing, Local Government and Heritage, Darragh O’Brien.

Housing for All also includes a plan to replace the RIHL with the Local Authority Home Loan later this year.

The new rates announced today will also apply to the new scheme when it is put in place.