AIB, EBS and Haven will increase the payment for mortgage switching customers by 50pc to €3,000 from May 27.
The move comes after the switcher market fell off a cliff in the wake of 10 hikes in European interest rates, with banks and other mortgage lenders passing on around half of these in the form of higher fixed rates.
The decision by AIB Group to increase it payment from €2,000 indicates that the switcher market is getting hot again.
AIB said the payment helps cover the costs associated with switching, and aims to encourage switching for mortgage customers, particularly those whose fixed rate mortgages are coming to an end.
Between 70,000 and 80,000 mortgage holders are coming to the end of fixed rates this year.
Many of them locked in at rates as low as 2pc, but are now faced with a market where typical fixed rates are at least double that.
The increased switcher payment makes AIB Group’s mortgage offerings even more competitive following recent rate reductions of 0.2 percentage points across AIB, EBS and Haven green mortgages last week, the bank said.
The switcher payment is available for eligible customers switching to an AIB Group mortgage.
The payment is also available for any customers already in the pipeline who draw down their mortgage from May 27 next.
In recent years many customers in Ireland opted for security, with half locking in to fixed rate mortgage terms.
Many of these terms may now be coming to an end and as a result the switcher market is likely to become more active again, the bank said.
AIB managing director retail banking, Geraldine Casey, said: “We know the mortgage process can seem a bit overwhelming.
“That’s why we’re making it easier for customers to switch to us by increasing the switcher payment, so customers have more support in covering their costs.”
Broker Michael Dowling said that with 70,000 mortgage customers coming off fixed rates in 2024, borrowers need to look at the rates available from any bank, not just the incentive to switch to that bank.
“While the €3,000 offer to switch will more than cover the costs of moving bank, AIB Group fixed rates are more than 1 percentage point more expensive than what is available on the market, for non-green customers.”
He said the AIB five-year fixed rate is 5pc for an 80pc to 90pc loan to value, but the cheapest rate is 4.1pc.
Taking a € 300,000 mortgage, on a 35-year term, the difference is € 170 a month, or € 10,200 over the five-year period.
But the newly increased AIG Group incentive is excellent if borrowers have a green rated property as AIB Group have the cheapest green rates on the market, Mr Dowling said.