The cuts will save homeowners on a €300,000 mortgage with a LTV ratio greater than 80pc over €1200 a year
The move will see non-green rates cut by up to 0.65 percentage points.
Brokers said the decreases were overdue as the rates the group charges on mortgages for those who do not have an energy-efficiency homes is far higher than it charges those with good energy ratings.
AIB’s five-year fixed rate for non-green mortgages is being reduced by 0.65 percentage points.
And all other AIB non-green fixed rates are also coming down.
The reductions are effective from tomorrow.
The green four-year fixed rate at EBS, which is part of the AIB Group, is coming down by 0.35 percentage points. This follows recent non-green reductions.
Haven, which is the broker-focused unit of AIB, will have non-green rates that are up to 0.35 points lower than previously.
AIB Group has reduced mortgage rates.
Today’s News in 90 Seconds, Thursday, October 23
The cuts apply to new customers and existing borrowers with the group who are coming off existing fixed rates or want to move from a variable to the lower fixed rates.
Bank executives said the reductions reflect AIB Group’s commitment to delivering value for customers across a variety of mortgage products, whether their home qualifies for a green mortgage or not.
It said these latest reductions follow several cuts to green mortgage rates by AIB Group, as well as non-green rate cuts by EBS and green rate cuts by Haven earlier this year.
After the cuts, the monthly repayment on a new €300,000 AIB one-year fixed rate mortgage, with a loan to value of greater than 80pc over a 25-year term will be €1,500.
The previous monthly repayment would have been €1,606, representing a saving of €106 a month.
Over a year this works out at a reduction of €1,271 in repayments.
AIB’s managing director, retail banking, Geraldine Casey said: “We understand that some customers are buying a home in areas where green properties are limited.
“These new non-green rates in AIB and Haven will provide significant support to those customers, while the EBS green fixed rate reduction is extremely competitive.”
The rate cuts have been announced despite a strong chance that the new move by the European Central Bank could be a rate rise.
Michael Dowling, of Irish Mortgage Brokers, said the reductions were a reaction to the pressure customers and brokers have applied as AIB has been charging premiums of more than 1 percentage points for non-green rates.
He said a reduction of 0.65 points will save customers €107 a month on a €300,000 mortgage over a 30-year term.
“The reductions for AIB and Haven Mortgages on non-green rates brings them back in line with competitors.”
Mr Dowling said 75pc of properties in Ireland have a Building Energy Rating (BER) of C to F, so did not qualify for green rates.
Earlier this week a number of credit unions said they have come together to offer a standard mortgage product that will give new buyers and switchers an alternative to the banks.
The new product, Credit Union Mortgage, will mean there will be a standardised national mortgage, with a set interest rate. The new single mortgage product is launching with a variable interest rate of a competitive 3.85pc. The rate will be capped at 4.4pc for the first three years.