ALLIED Irish Banks is set to intensify the competition in the first time home buyer market, which makes up 50 per cent of all new borrowers. It has relaunched a home loans package, which is offering first time buyers various incentives aimed at obtaining their business.

The bank claims that its new first time buyers package is the only such package on offer from banks or building societies. Recent packages launched by institutions such as the Irish Permanent offer incentives to new borrowers, and are not aimed specifically at first time buyers, AIB sources claim.

So what is AIB offering in its new package for first time buyers?

The main features include:

. A 1.45 per cent discount on the variable mortgage rate for the first 12 months of the mortgage. At AIB's current variable rate of 7.45 per cent, first time buyers will pay 6 per cent (7.5 per cent APR) with a monthly repayment of £7.15 per £1,000 borrowed.

. The bank is also offering its Telephone a Loan package, with a 1.5 per cent discount on the variable interest rate for the life of the loan, currently 9.5 per cent (9.84 per cent).

. It is also offering a choice of repayment options - weekly, fortnightly and monthly and is also waiving its 0.5 per cent acceptance fee.

In 1994, the mortgage market stood at £1.635 billion and is estimated by AIB to have grown to £1.825 billion by the end of 1995. The bank estimates that the mortgage market will grow by a further £225 million to £2.05 billion by the end of 1996. First time buyers represent over 50 per cent of all new borrowers, indicating a potential market from this category borrower this year of over £112 million.