Bank of Ireland has made a further reduction to the variable mortgage interest rate offered to new borrowers. The bank has announced an interest rate of 4.39 per cent which new borrowers can select for the first 12 months of their mortgage.

The annual percentage rate (APR) is 5.6 per cent. The new lower rate compares with its standard variable mortgage rate of 5.6 per cent (APR 5.7 per cent). Bank of Ireland is advising potential new homeowners to base their mortgage decision on the overall package being offered by the mortgage provider.

Its package includes bridging finance for buyers trading up or those waiting for the first-time buyer's grant. It also gives mortgage holders the option to defer payment for up to three months at the start of their mortgage or to take a three-month break.