Bank of Ireland has launched a new (or updated) mortgage offer known as Cashback PLUS, which offers 2% cashback to current account customers who draw down a new mortgage, alongside an additional 1% cashback in five years. The offer is available to customers who draw down their mortgage before March 31st 2017. The previous offer simply provided customers with 2% cashback without any additional carrot.
“We want to support our current account customers with a tailored mortgage offering, so Cashback PLUS is designed to provide an additional bonus a few years into the mortgage journey. Our research with prospective houseowners has informed us of the issues they encounter and the types of support that are important to them,” said John O’Beirne, Head of Mortgages at Bank of Ireland. “Therefore we have developed an innovative range of offerings to help make things easier, including our new Cashback PLUS product. We have a full suite of products for customers at different stages of the home-buying journey – saving a deposit, searching for the perfect property, and settling in and managing repayments.”
According to the Irish Independent’s Charlie Weston, however, this isn’t simply out of the goodness of Bank of Ireland’s heart. Weston reports that Bank of Ireland originally introduced a ‘claw-back’ condition which allowed it to recoup some cash should a customer either pay off or switch their mortgage within five years. However an EU directive prevented this measure from being taken, and so Bank of Ireland has instead decided to sweeten its mortgage deal in a bid to retain customers and prevent people claiming the cash and then switching providers.
“…The new incentive is to ensure the bank builds up its current account customer base, and keeps mortgage customers for at least five years,” Weston writes. “The 1pc loyalty payment is worth €1,000 on every €100,000 borrowed. A cash-back offer of 3pc on a €200,000 mortgage works out at €6,000.”
However, The Irish Times‘ Fiona Reddan warns that not all customers will be tempted by this new and improved offer, as the bank’s variable rates remain quite high.