New arrival could change Irish mortgage market – expert

The arrival of Avant Money could change the way that the Irish mortgage market is structured, according to a mortgage expert.

With the announcement of the first sub 2% rate in the market since trackers were available, Avant Money will bring rate cuts, increased choice and long-term value to Irish consumers, according to mortgage expert Martina Hennessy, Managing Director of doddl.ie.

“Avant Money will initially be offering a market beating 1.95% three, five and seven-year fixed rates on less than 60% loan to value with a follow-on variable rate of 2.5%,” said Ms Hennessy.

Mortgage expert Martina Hennessy, Managing Director of doddl.ie. Picture Conor McCabe Photography

“They have come to market offering fixed rates of 3, 5 and 7 years with strong follow on variable rates.

“At every loan to value bracket they offer rates that are equal to or lower than existing rates on market offering value to consumers regardless of loan to value.

“The introduction of Avant Money’s lower fixed rates is very timely as three quarters of all new mortgage customers to end June took a fixed option over a variable.

“They have not introduced a new business variable rate but do allow up to 1% of the original mortgage balance to be overpaid annually.

“Where lenders on market currently offer fixed rates tiered by loan to value of less than 60%, 60 to 80% or over 80, Avant Money discount at every 10% loan to value interval.”

Avant’s lending will initially be geographically concentrated on Dublin, Cork, Galway, Limerick and Waterford cities and surrounding areas. Their minimum mortgage amount is set at €100,000.

Avant Money’s parent Bankinter offer fixed for life products which are popular with the Spanish and Portuguese markets they operate in.

“Irish consumers currently have access to up to 10-year fixed rates but by far the most popular rates are still the short-term fixed rates,” said Ms Hennessy.

“If Avant Money introduced longer term fixed rates with favourable pricing, portability and less punitive break options, then this could mean a shift in the Irish market from variable and short-term fixed rates to longer-term fixed options.

“They are introducing their products without any cashback or switcher package which is commonplace in market with the other lenders. Their focus is on pure value rather than incentives

“They will have a limited product offering, currently at three, five and seven-year fixed rates, only, and there will be no exceptions to the Central Bank macroprudential lending rules.”

Avant Money are offering their mortgage products via a select number of mortgage brokers.

This is similar to the introduction of mortgages by Finance Ireland and ICS in recent years.

“Mortgage brokers’ share of the market continues to grow and with the introduction of Avant Money brokers offer lowest market rates which are not accessible directly by customers.

“A mortgage platform such as doddl.ie offers choice and access to eight mortgage lenders under one roof.

“Existing mortgage holders should really see the introduction of these new low rates from Avant Money as a prompt to review current terms, understand what mortgage rate they are paying and look to switch their mortgage if they can avail of a lower rate. The savings are substantial.”