FURTHER evidence of the trend towards lower, longer term interest rates has been provided by a reduction in rates from the EBS building society. The society has cut its longer term fixed rates for new borrowers by up to 0.75 of a percentage point, following reduction in rates on the bond market.

The EBS is now offering a five year loan at 7.5 per cent for new borrowers and a three year rate at 7.05 per cent. The announcement from the society follows last week's fixed rate reduction by the Irish Permanent. However, the EBS is now undercutting the Permanent for three and five year loans. The society also announced a small 0.1 of a point reduction in its one year rate to 5.85 per cent.

The move towards lower fixed term interest rates follows the recent sharp fall in interest rate on the Government bond market. International fund managers have been investing heavily in the Irish market in the belief that Ireland would be among the first states to qualify for EMU.

Mr Martin Walsh, head of lending at the EBS, said that borrowers could now ensure that home loan rates would remain at manageable levels over a period of years.