Avant Money, owned by Spain's Bankinter, has moved to keep its place as the lowest-cost mortgage lender in Ireland by cutting a range of fixed-rate home loans, including for first-time borrowers.
The development comes at a key time for the Irish mortgage market as two of the three largest home loans providers, Permanent TSB and Bank of Ireland, are set to benefit most from the departure of Ulster Bank and KBC from banking in the Republic.
The Irish banking and mortgage market are among the most concentrated in Europe and has among the most expensive home loans across the eurozone.
The exit of two banks, which currently have a combined share of about 27%, is widely seen as only making matters worse.
Avant Money made a splash when it entered the Irish market last year, offering some borrowers a loan rate of below 2%, the lowest in the market.
Its latest move involves it cutting its fixed rates across a range of term loans from three to 10 years.
For first-time borrowers seeking loan-to-value loans of between 80% to 90% of the value of the property, it has cut its rates fixed for three years to 2.35% and its 10-year fixed rate to 2.65%.
The entry of Avant Money into the market, which came before Ulster and KBC said they were exiting the banking market, had caused a splash and promised to bring competition into mortgage lending.
However, some brokers said the dominance of the existing large mortgage lenders has meant that mortgage rates have not fallen significantly across the board.
"Our new 10-year fixed rate mortgage provides an attractive option for those customers who have been asking to lock into our low interest rates for even longer," said Brian Lande, head of mortgages, at Avant.
Earlier this week, Finance Ireland – which is 30%-owned by the Government's Ireland Strategic Investment Fund – said it aims to grow "significantly" to win as much as 15% of the home-loans market, as it launched a 20-year, fixed-rate mortgage for the first time.
The lender plans to offer a mortgage for a loan-to-value of up to 90% of the property, at a rate that is fixed over 15 years of 2.8%.
It will offer a mortgage at the same loan-to-value term, but fixed for 20 years, at 2.99%.
Leading brokers have in the past said the problems of the mortgage market run deep.
Mortgage broker Michael Dowling and Brendan Burgess of the Irish personal finance website Askaboutmoney have said the the Competition and Consumer Protection Commission, or CCPC, and the Central Bank have key roles to play to outlaw cashback incentives.
They say these incentives are used by banks with the most to benefit from the exit of Ulster Bank and KBC to keep mortgage rates at elevated levels.
Permanent TSB, in which the Government owns a 75% stake, is in talks to buy large part of the Ulster Bank's mortgage loan books, of which about €15bn is accounted for by mortgage loans.
Bank of Ireland, in which the Government owns a 14% stake, is in talks to buy the performing loans from KBC Bank, which has a total mortgage loan book of about €10bn.