AIB offering ‘green’ mortgage with 2.5% rate

AIB is offering a five-year fixed mortgage with a 2.5 per cent interest rate for homes with the highest energy efficiency ratings, a move designed to boost its lending in climate-friendly products.

The bank’s rate, for properties with a building energy rating of A1-B3, is the joint best on the market for a five-year term and undercuts its own rate by 0.35 percentage points.

However, there are cheaper interest options available from other lenders, with KBC and Ulster Bank offering a two-year fixed rate for 2.3 per cent.

Nevertheless, AIB’s five-year rate is as competitive as Ulster Bank’s over that time frame and will be available to both new and existing owner-occupier mortgage holders.

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For a €300,000 property with a 90 per cent loan-to-value ratio, customers will save just under €50 per month on this rate compared with AIB’s existing five-year offering.

"Climate change is the most important challenge facing this generation ... We recognise that supports are needed to help change societal behaviour, and we will not be found wanting in helping our customers adapt and transition," said AIB chief executive Colin Hunt.

This move from AIB follows its announcement in June that €5 billion would be made available over the coming five years for climate-related and green products.