New mortgage lender Finance Ireland has signalled its plan to make a splash in the market by matching the lowest variable and fixed-rate mortgages from the large banks.
The new entrant had first made its intentions clear to enter the Irish residential mortgage market a year ago, but has unexpectedly launched today with among the lowest rates available.
Run by Billy Kane, the former Irish Permanent chief who helped set up the lender over 16 years ago, Finance Ireland already supplies car-finance loans and commercial property and SME loans.
The so-called non-bank lender now plans to offer a variable rate of 3.15% for customers borrowing at a loan-to-value of up to 90% and to offer three-year and five-year fixed rates of 2.65% and 2.8%.
Loan-to-value mortgages of 90% are favoured by many first-time buyers.
Independent broker Michael Dowling said he was surprised that Finance Ireland was matching the lowest rates for both variable and fixed-rate mortgages and believes the new entrant will make a significant difference.
“This is good news for borrowers. This is a significant move,” Mr Dowling told the Irish Examiner.
The lender is not offering the much-criticised cashback mortgages or insisting on other conditions to tap the lowest rates, he said.
The Irish market for new mortgage business is expected to grow to over €10.6bn this year.
There is, however, little competition and the lenders charge among the costliest home loans in the eurozone.
The ECB has in recent weeks said it has put back the proposed date to start increasing interest rates, and markets believe it won’t hike rates for some time.
“We are delighted to expand our offering in the residential mortgage market, where there has been too little competition for too long,” said Mr Kane.
He said that Finance Ireland aims “to build a substantial mortgage business” without relying on incentives. A spokesman said it will offer “a straightforward product, rather than a cashback-style product”, t