The pressure on the big banks is increasing as the cheapest home loan provider in the market has launched a new round of mortgage rate cuts.
Avant Money is going to cut its fixed rates again by 15 Irish independent have learned.
Headquartered in Leitrim, the lender is expanding its coverage to make its mortgages available across the country.
When it first started here, it limited its activities to cities and larger urban areas.
Meanwhile, Finance Ireland is cutting its 10-, 15- and 20-year fixed rates starting Monday and introducing a new 25-year fixed rate peg. Most rates drop 0.10 percentage points.
Finance Ireland is also introducing a limited offer of € 1,500 in professional fees for switching and taking on a long term fixed rate.
Avant Money, owned by Spanish banking group Bankinter, is cutting its fixed interest rates by as much as 0.30 percent to increase competition.
The lender, who sells its products through brokers, seriously disrupted the market when it became the first to offer below 2 percent mortgage loan when it moved to Ireland last year.
It introduced the lowest interest rate of 1.95 percent for those whose mortgages are 60 percent or less of the value of their homes.
Avant Money doesn’t cut that rate this time, but does cut the cost of 15 of its different fixed rates and two of its variable follow-up rates that borrowers will fall back on at the end of their fixed-rate term.
The cuts mean savings of thousands of euros for first-time buyers and those switching who take out an avant-money mortgage.
The new interest rates apply to a range of lending values.
So far, the best rates have been limited to first-time buyers with larger deposits and moving and switching companies that have built up a lot of equity in their homes.
The new tariffs are intended to be particularly attractive for first-time buyers. This is because new buyers typically need a higher mortgage lending value.
Avant Money, like most lenders, offers better interest rates for those with a lower LTV.
Starting next week, Avant Money will offer a three-year fixed interest rate of 2.20 percent with a loan-to-value ratio of 90 percent.
That is 0.15 percentage points less than the next best offer on the market.
Changers who need a mortgage of € 250,000 over 20 years with a loan of 70 percent can save up to € 56,000 over the term of their mortgage with the new lower fixed interest rate of three years.
This is based on an avant money rate of 2.05 percent compared to the Bank of Ireland’s three year rate of 3 percent.
Avant Money said the rate cuts would provide an additional incentive for KBC and Ulster Bank customers who might consider their mortgage options in the coming months.
With the imminent departure of two banks, Avant Money aims to become the fourth largest provider of mortgages here after AIB, Bank of Ireland and Permanent TSB.
Despite non-bank lenders Avant, ICS Mortgages and Finance Ireland have recently cut rates and offered innovations like 30-year maturities, but the AIB and Bank of Ireland have made little reaction.
Brian Lande, Head of Mortgage at Avant Money, said the lender’s products are now available to customers across Ireland as the company has expanded its range of locations and appointed new brokers.
“The advice and guidance from our panel of mortgage brokers is especially valuable to consumers looking to compare their full range of options in the market,” he said.