€400m ‘First Home Scheme’ to help first time buyers

Avant Money (formerly known as Avantcard) launched today and confirmed its new mortgage products are now available to Irish customers, with fixed rate mortgages starting from 1.95%, by far the lowest rate in the market today.

The company has been providing credit cards and personal loans to Irish consumers for over twenty years. Avant Money is owned by Spanish banking group Bankinter, which also has operations in Portugal and Luxembourg.

We, at MyMortgages.ie, are proud to announce that we are one of Avant Money’s partners and we are here to guide and advise switchers, movers and first-time buyers on the range of these new products.

Joey Sheahan, Head of Credit, MyMortgages.ie and author of The Mortgage Coach says:

“Avant Money’s entry into the Irish market is the best news for Irish mortgage holders. We have long seen European rates well below 2% compared to closer to 3% for Irish mortgage holders, and now, for the first time since before 2008, rates below 2% are available to homeowners in Ireland. It’s a once in a decade or maybe even 2 decade opportunity where a new lender enters the Irish market and reduces interest rates to this extent. We are delighted to be one of Avant Money’s partners and our advice to mortgage holders is now is the time to review their current mortgage, even if they have done so recently. A mortgage holder with €300,000 outstanding with 32 years remaining and Loan to Value of below 60% can save €158 monthly or €60,000 over the term of mortgage based on reducing interest rate from 2.95% to 1.95%”.

Housebuyers are paying an average of 7% more for a new home than they would have a year ago, with experts warning prices are only going to keep rising as long as the enormous gap between supply and demand remains.

The prices of homes have almost doubled since their recession-era low in 2013. While there was no increase in the year to June 2020, over the past year they have surged again — rising by between 6.9% and 6.4% in Dublin, and 7.4% across the rest of the country — according to the Central Statistics Office.

Source: https://www.irishexaminer.com/news/arid-40358162.html

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.

Source: https://www.independent.ie/business/personal-finance/property-mortgages/spanish-bank-to-shake-up-mortgage-market-here-with-30-year-fixed-rate-loans-40552755.html

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”. 

The company has been operating here for a number of years, providing credit cards and personal loans under the Avant Card brand. Owned by Spanish bank Bankinter, Avant Money will now offer fixed-rate mortgages starting at 1.95%, with variable rates starting at 2.5%.

Last week, the Central Bank released July mortgage data which showed that the average interest rate on new mortgages stood at 2.82%. Only Latvia and Greece have higher mortgage rates, while the average rate in the Euro area stands at only 1.35%.

Joey Sheahan is head of credit at MyMortgages.ie and is the author of The Mortgage Coach. He says that the arrival of Avant Money is great news.

“We have long seen European rates well below 2% compared to closer to 3% for Irish mortgage holders, and now, for the first time since before 2008, rates below 2% are available to homeowners in Ireland. It’s a once in a decade, maybe even two-decade opportunity, where a new lender enters the Irish market and reduces interest rates to this extent.”

The company will not be dealing directly with customers but will be using the broker network to sell their products.

Daragh Cassidy of independent price comparison and switching site Bonkers.ie, is also positive about the arrival of sub-2% rates. He points out, however, that not everybody will be able to avail of them.

“While the headline rate of 1.95% from Avant Money is certainly eye-catching and will capture all the headlines, it requires a deposit of at least 40%, which will be vastly unachievable for most first-time buyers. Most first-time buyers are only able to save a deposit of 10% or 20% max.”

“The lowest rate available to buyers with a deposit of this size from Avant Money is 2.35%, which isn’t far off the rates already available at the moment.”

He points out that first-time buyers can currently get a two-year fixed rate of 2.30% from both KBC and Ulster Bank, while KBC also offers a 2.35% fixed rate over three years.

Moreover, Avant Money has also decided against the kind of cashback offer that has proved very popular in the Irish market. The aforementioned Ulster Bank will pay €1,500 cashback on mortgage drawdowns, while KBC offers €1,500 on its three, five, and 10-year rates. So from that point of view, Avant Money isn’t offering much better value here.

“And while cashback has proven to be controversial,” says Mr Cassidy, “it can’t be denied that it’s been extremely popular with first-time buyers in Ireland who might use the funds to help pay back the ‘bank of mum and dad’ once they’ve gotten their mortgage, or to help towards buying things like furniture once they’ve moved into their new home.”

He’s also disappointed that Avant Money is only offering a fixed rate of up to seven years. Fixed rates of up to 10 years are now on offer here, while on the continent, it’s possible to fix for 20 years. More competition in this space would have been welcome.

 

AIB has announced cuts of up to 0.2% on its fixed-rate mortgages.

That said, we’ve already seen the established mortgage providers reacting positively to the arrival of a new competitor. AIB has just announced cuts of up to 0.2% on all its fixed-rate mortgages and Haven, which is part of AIB group, has also upped its game. The mortgage intermediary is now offering new home buyers €5,000 cashback on fixed-rate mortgages of €300,000 or more that drawdown between 21 September, 2020, and 31 December, 2021.

The rest of the banks are sure to follow suit.

The Avant Money offering may be particularly attractive to switchers, particularly those who bought their property between five and 10 years ago. They will likely have sufficient equity in the house to allow them to avail of the sub 2% rate. Because Avant has eschewed the cashback offer, however, switchers need to be aware that there will be no contribution to the legal bills typically associated with a switch. These can run to between €1,000 and €1,500.

Joey Sheahan of MyMortgages, which is one of the brokers Avant Money will be working with, advises everyone to review their current rate.

“A mortgage holder with €300,000 outstanding with 32 years remaining and loan to value of below 60% can save €158 monthly or €60,000 over the term of the mortgage based on reducing the interest rate from 2.95% to 1.95%,” he said.

Trevor Grant of the Association of Irish Mortgage Advisers also urges mortgage holders to take a fresh look at the market. “Our members regularly meet consumers who are paying between €200 and €300 a month more than they need to, which is not an effective use of their hard-earned money,” he said. “With so many offers out there, many if not most homeowners could now secure a better deal for themselves if they shopped the market.”

He said the recent release of the CSO’s property price index for July shows that there’s been no collapse in prices as a result of the Covid-induced economic contraction. In the year to July, residential property prices fell by 0.5%.

“There is still a cohort of potential homeowners that have remained fully employed throughout Covid, who are actively looking for a home, and who are successfully applying for and securing mortgages. A significant number of first-time buyers, particularly in Dublin, traditionally come from those sectors — digital, IT, financial, and public sector — that have proved resilient during Covid-19 and the prospect of buying a new home is still as real for them as it ever was.”

“The volume of applications received from first-time buyers and movers by our members, particularly over the past three months, has demonstrated a strong level of demand. As reflected in recent industry figures, there is an increased demand for market-based mortgage advice from mortgage seekers.”

But while prices are holding up, and while some of us are protected from the recession, there’s no denying the impact of Covid-19 on the mortgage market. The Central Bank’s July statistics, released last week, show that €445m was agreed in new fixed-rate mortgages in the month, a decrease of 31% on July 2019. New variable rate mortgage agreements fell even further — by 46% year-on-year — to €111m.

Read the full article here – https://www.irishexaminer.com/business/economy/arid-40050572.html

“It’s a once in a decade or maybe even 2 decade opportunity where a new lender enters the Irish market and reduces interest rates to this extent”

By Megan Martin, RSVP

In response to the newcomer, AIB announced today that they were introducing a new Loan-to-Value (LTV) fixed rate for mortgages with a fixed rate as low as 2.25%.

“Avant Money’s entry into the Irish market is the best news for Irish mortgage holders. We have long seen European rates well below 2% compared to closer to 3% for Irish mortgage holders, and now, for the first time since before 2008, rates below 2% are available to homeowners in Ireland,” said Joey Sheahan, Head of Credit, MyMortgages.ie and author of The Mortgage Coach.

“It’s a once in a decade or maybe even 2 decade opportunity where a new lender enters the Irish market and reduces interest rates to this extent.

Read the full article on RSVP here – https://www.rsvplive.ie/life/never-been-better-time-homeowners-22681797

Fixed-rate mortgages from 1.95%

Joey Sheahan, head of credit with MyMortgages.ie, welcomed Avant Money’s entry into the Irish market. “We have long seen European rates well below 2% compared to closer to 3% for Irish mortgage holders, and now, for the first time since before 2008, rates below 2% are available to homeowners in Ireland.”

“We are delighted to be one of Avant Money’s partners and our advice to mortgage holders is now is the time to review their current mortgage, even if they have done so recently.

“A mortgage holder with €300,000 outstanding with 32 years remaining and Loan to Value of below 60% can save €158 monthly or €60,000 over the term of mortgage based on reducing interest rate from 2.95% to 1.95%.”

Read the full article on Biz Plus here – bizplus.ie/avant-money-enters-irish-mortgage-market/

…

Joey Sheahan, head of credit at MyMortgages.ie, said Avant Money’s entry into the Irish market was the “best news” for Irish mortgage holders.

“We have long seen European rates well below 2 per cent compared to closer to 3 per cent for Irish mortgage holders, and now, for the first time since before 2008, rates below 2 per cent are available to homeowners in Ireland,” he said.

“It’s a once-in-a-decade or maybe even two-decade opportunity where a new lender enters the Irish market and reduces interest rates to this extent.

“We are delighted to be one of Avant Money’s partners and our advice to mortgage holders is now is the time to review their current mortgage, even if they have done so recently.

“A mortgage holder with €300,000 outstanding with 32 years remaining and loan-to-value of below 60 per cent can save €158 monthly or €60,000 over the term of mortgage based on reducing interest rate from 2.95 per cent to 1.95 per cent.”

…

Read the full article on The Irish Times – https://www.irishtimes.com/business/financial-services/avant-money-enters-mortgage-scene-with-lowest-rate-on-irish-market-1.4354349