Bank of Ireland is set to increase the amount it is refunding new mortgage customers, as competition in the mortgage market heats up.
The bank’s existing 2 per cent cashback on mortgages was due to expire at the end of September, but the bank has now replaced it with a new CashbackPlus offer. While the offer has now become even more attractive, rewarding home buyers with a 2 per cent cashback on their new mortgage at drawdown, along with an extra 1 per cent cashback five years later, customers must also have a current account with the bank to qualify.
The improved offer is available to current account customers of the bank who draw down a new first-time buyer, mover or switcher mortgage before March 31st, 2017.
If you don’t have a current account with the bank, or don’t want to switch to it, you can still get the existing 2 per cent cash-back offer. Investors, or those looking for equity release mortgages, will also be eligible for the 2 per cent cash-back offer.
The new 3 per cent offer means that someone drawing down a mortgage of €150,000 will get €3,000 straight into their account, plus an additional €1,500 after five years. If you’re buying a house on a mortgage of €500,000, you will get a cashback of €10,000 straight away, plus a further €5,000 back after five years.
BOI is not the only bank to offer a cashback on mortgages. Permanent TSB is offering its customers 2 per cent cashback until December 31st, while EBS also offers 2 per cent back.
Higher rates
While home buyers will welcome the latest offer from the bank, it's worth noting that the bank's variable mortgage rates are some of the highest on the market. Over the long-term, this can defray much of the benefit of the cashback offer. For example, the bank's standard variable rate is 4.2 per cent compared with 3.5 per cent at AIB. However the bank's fixed rates are more competitive, with a one-year fixed product offering a rate of 3.55 per cent on loan-to-value of more than 80 per cent.
Moreover, it’s difficult to avoid charges on your current account with Bank of Ireland. Customers can avoid account transaction fees by keeping a minimum balance of € 3,000 in their current account, but they will still be liable to quarterly fees of €5.
