Ulster Bank to pass on rate cut

ULSTER BANK is to cut its variable mortgage rates by 0.2 of a percentage point from early next year in a move which will save a customer with a mortgage of €300,000 about €40 a month

In a statement yesterday, the bank said it was passing on the rate cut as a result of a reduction in its funding costs, and the cut would come in from February 1st.

Ulster Bank is of one of the lenders which dug its heels in last month and again at the beginning of December by refusing to pass on successive rate cuts announced by the European Central Bank to its customers with standard variable-rate mortgages.

The bank is one of three lenders who were brought in to meet senior Ministers six weeks ago as public anger at their failure to pass on cuts to standard variable-rate customers mounted.

As a result of the meeting, AIB passed on a cut of 0.25 of a point to its standard variable-rate customers, but both Bank of Ireland and Ulster Bank refused to budge. This month Bank of Ireland announced a 0.15 point cut to its customers.

Ulster Bank’s standard variable rate cut announced yesterday will see its main lending rate in the category fall from 5.1 per cent – the second highest rate charged by the country’s leading banks – to 4.9 per cent.

By contrast, AIB’s standard variable rate is 3.19 per cent, while Bank of Ireland charges a rate of 4 per cent.