The latest move means mortgage offerings here are finally starting to resemble those in the likes of Spain and France
Spanish-owned mortgage provider Avant Money has upped the ante on its rivals by offering a range of new long-term fixed rates.
The provider is the first here to offer a 30-year fixed rate, in a move that has the potential to transform the mortgage market.
This means repayments will be the same every month for the life of the loan.
Its new continental-style offerings, for between 15 and 30 years, have rates as low as 2.25pc.
The suite of new long-term fixed rates from Avant Money comes weeks after non-bank lender Finance Ireland surprised the market when it launched an innovative 20-year mortgage.
Long-term fixes are a feature of mortgages on the continent, where rates from around 2pc are common.
The latest moves mean mortgage offerings here are finally starting to resemble those in the likes of Spain and France, despite the imminent departure of Ulster Bank and KBC.
Wholesale interest rates are at historic lows, with homeowners here mainly taking out fixed rates over increasingly longer period.
This means long-term fixed rates are starting to attract interest from borrowers here.
Now Avant Money has launched 15-, 20-, 25- and 30-year mortgages. The rates vary depending on the amount being borrowed relative to the value of the home, but are lower than those offered on most shorter-term home loans.
A rate of 2.85pc will apply for those borrowing over 30 years who are borrowing 60pc or less of the value of the home.
For those with a loan-to-value of 80pc the rate rises to 3.1pc. For those borrowing over 15 years, with a loan-to-value of 60pc, the new rate is 2.25pc.
Avant Money, owned by Spain’s Bankinter, shook up the market here last September when it launched offering the lowest rates. Its lowest rate is 1.95pc, considerably cheaper than its rivals.
The new products will have flexibilities built in. Avant Money will allow borrowers to overpay up to 10pc.
There will be a cap on the fees for redeeming the mortgage, and flexible options if moving home. Those moving will be able to port the existing mortgage to a new home.
Loans can be repayable up to the age of 70.
Switchers and movers are expected to be the most likely to take up the new products, but first-time buyers with big deposits may also find the certainty of a long-term fix attractive.
Head of mortgages for Avant Money Brian Lande said the new offers would allow Irish consumers the opportunity to lock into fixed rates for their full mortgage term at a time when interest rates are at a historical low.
“I’m also delighted to confirm that we will be extending these new flexible features to all of our existing and new customers across our product range,” he said.
In May, Avant Money cut a number of its rates, and launched four- and 10-year fixed rates, which are the lowest in the market.
This is in addition to having the lowest rate of 1.95pc for those whose mortgages are 60pc or less of the value of their homes.
Its aggressive pricing will be a relief to buyers and switchers as Ireland continues to have some of the most expensive mortgages in the Eurozone.
With the imminent departure of Ulster Bank and KBC, Avant Money is aiming to become the fourth largest provider of mortgages here after AIB, Bank of Ireland and Permanent TSB.
Joey Sheahan, Head of Credit and Author of The Mortgage Coach, MyMortgages.ie
“ This is great news for mortgage holders in Ireland. Not only does a 30 year fixed term offer the promise of a guaranteed level of mortgage repayments over the long term for those mortgage holders who opt for it, it also represents a step in the right direction for the Irish mortgage market. We are catching up with our European counterparts when it comes to fixed rates – and overall better value on rates.
Other lenders will now find themselves under pressure to develop and offer better mortgage products so as to remain competitive.
Mortgage holders may well be confused or unsure as to whether a long term fixed rate is the best route for them, so we are urging anyone considering their options to contact a broker who can take an overall assessment of their individual situation and advise them as to the best course of action”.