And the Leitrim-based lender is introducing a cash-back offer across all its mortgage products.
The moves come a week after AIB launched two new low-cost ‘green’ mortgage rates, with Bank of Ireland and PTSB also adjusting their rates earlier this year.
The steady tit-for-tat in the mortgage war will be welcomed by homebuyers.
The European Central Bank has cut main rates three times this year and a fourth cut is expected in December.
From next week, Avant Money is cutting its fixed rates by up to 0.4 of a percentage point, and offering cash back worth 1pc of the value of the funds being drawn down.
This will mean its One Mortgage, where the interest rate is fixed for the life of the mortgage, will have rates starting from 3.4pc, down from 3.8pc.
It is also reducing its three-year rate, down 0.1 of a percentage point to 3.6pc for those borrowing 80pc or less of the value of the home.
Its four-year fixed rate, which is its most popular mortgage product, will see its rate go from 3.6pc to 3.4pc.
The new rates are effective from next Thursday, November 7, with the cash-back incentive coming in from the start of next year.
Avant Money does not offer green rates, where lenders offer lower rates for homes that are highly energy efficient.
Its Irish operation is headquartered in Carrick-on-Shannon, but it is owned by Spain’s BankInter.
It plans to launch as full service bank early next year when Avant Money will become a branch of the Spanish bank. By the second half of next year it aims to offer deposit products.
Avant Money had resisted offering cash back up to now, other than for switchers.
Avant Money’s head of mortgages Brian Lande said customer demand meant it was now offering cash-back on all its home-loan products.
On typical €300,000 mortgage the cash back will be worth €3,000.
There is no change for existing Avant Money mortgage customers.
Mr Lande said: “As market rates fall, we are pleased to pass the benefit directly to our customers through reduced interest rates and a new cash-back incentive. The cash-back incentive is designed to offset the costs associated with moving home or switching mortgage”.
Mortgage broker Michael Dowling said the new Avant Money rates are the cheapest rates available for those borrowing where they do not qualify for a “green” rate.
New mortgage customers with Avant Money will see repayments fall by between €17 and €71 per month on a mortgage of €300,000 over a 35-year term, depending on the fixed rate they choose.
“The introduction of the 1pc cashback will make Avant Money more competitive in terms of their overall mortgage offering and should improve their share of the mortgage market,” Mr Dowling said.
Last week AIB launched two new low-cost ‘green’ mortgage rates. It was the fourth time this year that AIB has made a mortgage rates announcement.
AIB has already cut its rates three times this year, and is now introducing two short-term green rates.
Green rates are lower than conventional mortgage rates and are for homeowners with highly energy efficient homes.
In April Bank of Ireland reworked its fixed-rate green mortgage range to offer customers discounts for homes with energy-efficiency ratings of A right down to G.
The new so-called EcoSaver mortgage replaced the bank’s current green mortgage offering effective from April 18th for new business or existing customers who move to the new product from another one with the bank, it said.
Customers with a home carrying a Building Energy Rating (Ber) of A would qualify for a 0.35 percentage point discount against the prevailing fixed-rate price for their loan product. The discount narrows to 0.3 points for B-rated homes, right down to 0.05 points for G-rated properties.
In May PTSB cut key mortgage lending rates by up to 1 percentage point, the third time in months that the majority State-owned bank has cut its mortgage rates.
Banks are fighting hard for mortgage market share.
Bank of Ireland said today its has a 41pc share of new mortgages. PTSB has 16pc of the new mortgage market, with AIB thought to have around 33pc.
