While increased competition between banks for an increased share of new mortgage lending has resulted in more competitive variable interest rates, those rates remain almost double the euro-area average (as recently highlighted again in the Irish Times).
Certain Irish banks are still promoting fixed interest rates to customers, leaving variable rates well above competitors. In addition the offer of lump sum cash back offers for new mortgage lending, or for customers switching mortgages, appears to be the preferred marketing strategy rather than lowering interest rates. While this may be an attractive short term incentive, a reduction in rates would result in a much greater saving for borrowers over the lifetime of a mortgage loan.
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