AIB is reducing variable mortgage interest rates. In a statement, the group says a reduction of 0.25% will take effect from December 1st for new and existing customers.

It will affect 146,000 existing mortgage holders with AIB, EBS and Haven.

AIB says customers with a €200,000 mortgage will save up to €334 per year, based on a 25 year term.

It is also introducing new fixed mortgage rates across all three brands. These include 3.8% in respect of its three year fixed rate, and 3.9% for its five year fixed-rate mortgages.

Director of personal banking with AIB, Bernard Byrne, said "AIB is now in a position to reduce variable mortgage interest rates due to the bank's underlying positive performance and funding cost reductions."

"The introduction of the bank's new fixed rate pricing will provide better value and certainty for customers," he added.

Personal finance editor with the Irish Independent, Charlie Weston, says it is overdue - but welcome.