Bank of Ireland is to reduce its fixed mortgage rates for owner- occupiers by up to 0.41 per cent. However the reduction, which will be effective from tomorrow, will only apply to new customers.

The move means that five- year fixed rates will fall back to 5.29 per cent, from 5.70 per cent previously, while the two- year fixed rate will fall by 0.26 per cent to 4.49 per cent.

Rates will also fall at Bank of Ireland’s subsidiary,the ICS Building Society, with the greatest reduction for three and five-year rates, which will both fall by 0.41 per cent. Its two-year fixed rate will fall back by 0.26 per cent to 4.79 per cent.

Last December, the bank launched a mortgage fund worth € 1.5 billion to facilitate first-time buyers or those moving home. So far in 2012, it has received applications to the value of € 528 million from potential property purchasers.