Avant Money, the mortgage provider owned by Spanish banking group Bankinter, is expanding its offering of low-cost mortgages to a number of new locations throughout the state. The move could increase pressure on other lenders to lower interest rates, as data shows that Avant now accounts for nearly one in five of all mortgage keys in the republic.
Avant launched an Irish mortgage product last September, dramatically downsizing existing players with the lowest rate of 1.95 percent available to those whose mortgage is 60 percent or less of their home purchase price. However, it initially focused on the Big Five and the surrounding passenger belts (Dublin, Cork, Galway, Limerick and Waterford). Now, it is expanding its reach and, starting this month, will begin making loans to homeowners residing in Athlone, Carlo Town, Dundalk, Kilkenny, Portlaoise and Wexford.
Mortgage rates
According to the lender, the measure will cover 71 percent of the country’s real estate. This will extend the matter even further over time.
“We are excited to continue our growth in Ireland and to offer low rates to Irish consumers who have imposed the highest mortgage rates in Europe for a long time,” said Brian Land, Mortgage Director at Avant Money.
Avant has also dramatically increased the number of brokers it works with, from 19 when it first launched to 32. It expects to increase this panel in the coming months.
Unlike other lenders, who often offer repayment on the mortgage value or a lump sum to help with the cost of conversion, Avant Money focuses on lower rates, which is a strategy that seems to work. According to BPFI data, Avant Money approved one in five mortgages in February.
Market transformation
With the exit of Ulster Bank from the Irish market, activity in the transformation market is likely to pick up again. The latest BPFI figures for March show that the level of mortgage carry-over rose to 15 percent of all mortgage approvals.
The Permanent Bureau for Telecommunication Standardization has recently adapted its strategy in this regard, offering a new low rate of 2.25% to new clients with a loan of less than 80%. It is aimed at customers who want a lower price, rather than a cash back offer.
The money-back offers have drawn criticism from the Competition and Consumer Protection Commission for offering low value to borrowers, as the fees associated with such products mean that homeowners end up paying more for their mortgage.
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