The bank is reducing its five-year green mortgage rate by 0.25 percentage points, bringing it down to 3.2% for properties with a Building Energy Rating (BER) of B3 or higher. Additionally, AIB is cutting its four-year fixed rate for mortgages of €250,000 and above by 0.25 points, making it available from 3.7%. These new rates will be available to both new and existing customers starting tomorrow.

AIB’s Managing Director of Retail Banking, Geraldine Casey, emphasised the importance of offering a variety of choices, value, and convenience for customers seeking to buy their new home. She noted that this latest cut aligns with AIB’s strategy to support customers in making more sustainable choices.

The rate reductions come in the wake of the European Central Bank’s (ECB) recent decision to lower its key lending rates for the second time this year. This has prompted other lenders, including Bank of Ireland, PTSB, and Avant Money, to also reduce their rates.

Broker Michael Dowling of Dowling Financial welcomed the rate cuts, highlighting that the reduction on AIB’s green rate will save borrowers approximately €13 a month for every €100,000 borrowed. AIB has also extended its approval in principle period from six to 12 months, giving customers more time to find and buy their new home.

The latest cuts are part of AIB’s broader strategy to remain competitive in the market. Martina Hennessy, Managing Director of broker Doddl.ie, pointed out that AIB’s non-green rate offerings had become higher than those of competitors, prompting the bank to make these reductions. She added that the cuts could save customers around €500 a year.

AIB’s latest rate cuts are seen as a positive development for the mortgage market, potentially leading to further reductions from other lenders and providing significant savings for borrowers.

The review, conducted by the Department of Housing, Local Government and Heritage, highlights the significant challenges faced by the private rental sector. Rising construction costs, high interest rates, and increasing material prices have made it difficult for developers to build new rental properties. As a result, the supply of rental homes has not kept pace with demand, leading to higher rents and a shortage of affordable housing.

One of the key recommendations from the review is to provide financial incentives to developers. These incentives could include subsidies, tax breaks, or grants to offset the high costs of construction and make it more viable for developers to invest in rental properties. The goal is to bridge the gap between the high costs of building and the lower sale prices that make rental projects less attractive to developers.

The review also emphasizes the need for a comprehensive approach to reforming the private rental sector. This includes enhancing regulations to protect tenants, ensuring that rental properties are safe and secure, and creating a more stable and predictable rental market. The government aims to create a framework that benefits both landlords and tenants, making the rental market more efficient and sustainable.

Public consultation has been a central element of this review. The Department of Housing has encouraged the public to share their views and experiences with the private rental sector. This input is crucial for shaping policies that address the real needs and challenges faced by renters and landlords alike.

Housing Minister Darragh O’Brien has acknowledged the difficulties in meeting housing targets and the need for innovative solutions. He has faced criticism for over-promising and under-delivering on housing schemes, but he remains committed to finding effective ways to increase the supply of affordable housing. The Croí Cónaithe Cities Scheme, for example, aimed to deliver 5,000 apartments in cities but has struggled to attract developers, with only a fraction of the target achieved so far.

The review’s findings underscore the importance of government intervention in the housing market. By providing incentives and creating a supportive regulatory environment, the state can encourage more investment in rental properties and help alleviate the housing crisis. The ultimate goal is to ensure that everyone has access to safe, affordable, and secure housing, whether they are renting or buying.

The government’s review of the private rental sector highlights the need for financial incentives for developers, enhanced regulations to protect tenants, and a comprehensive approach to reforming the rental market. Public input will play a crucial role in shaping these policies, with the aim of creating a more efficient, affordable, and sustainable housing system for all.