(Avantmoney) New entrant Irish Mortgage Market. Let the games begin!

Cape Clear

Hopefully this will give a much needed shake up to the market.

https://www.independent.ie/business/personal-finance/interest-rate-war-brews-as-new-bank-joins-market-39406557.html#:~:text=But%20now%20new%20entrant%20Avantcard,offer%20fixed%20rates%20below%202pc.

coylemj

They will cherry-pick the low LTV business by offering all sorts of gimmicks for switchers which will lead to a major deterioration in the quality of the Irish banks' loan books. Still doesn't mean they won't pick up a few tactical defaulters. Because who cares if a foreign bank picks up a few bad debts? They'll simply pack up and go home, just like Danske Bank and Bank of Scotland.

Geuze

I'll believe sub 2% when I see it.

There has been a lot of talk about new entrants for years.

No real competition, though.

kalych

coylemj wrote: »

They will cherry-pick the low LTV business by offering all sorts of gimmicks for switchers which will lead to a major deterioration in the quality of the Irish banks' loan books. Still doesn't mean they won't pick up a few tactical defaulters. Because who cares if a foreign bank picks up a few bad debts? They'll simply pack up and go home, just like Danske Bank and Bank of Scotland.

This!

Sheep Shagger

While people can stay in houses while not paying their mortgage and high courts writing off chunks of debt, there is no incentive for lenders to enter this market.

Best we will get is cherry pickers.

Jim2007

Sheep Shagger wrote: »

While people can stay in houses while not paying their mortgage and high courts writing off chunks of debt, there is no incentive for lenders to enter this market.

Best we will get is cherry pickers.

Shareholders/institutional investors do not take kindly to banks entering foreign mortgage markets.

Even in cases where it is much simpler: Say the French/German/Swiss border area around Basle, it is very difficult to get a bank to give a cross border mortgage, despite the countries having the same basic civil law and high incomes.

Yggr of Asgard

Avantcard (which is the brand Bankinter is using in Ireland) already offers competitive unsecure loans for some good conditions (on the higher loan amounts).

They are not new to the market in personal lending ever since they purchased MBNA's Ireland Credit Card business and have progressively extended their lending from cards only to loans and now to mortgage.

salmagoo

Phishnet wrote: »

COMPETITION IS GOOD.

It works both ways... more competitve mortgages means more competitive scramble for the already limited supply of houses which may inevitably lead to even higher house prices. However the one massive benefit of these new oncomes is the ability to overpay 20% without getting charged an early payment fee! Now that is a sexy propositiion!

coylemj

salmagoo wrote: »

It works both ways... more competitve mortgages means more competitive scramble for the already limited supply of houses which may inevitably lead to even higher house prices.

That would be the case if people could borrow based on the size of the monthly repayment. In which case what you say would apply - the monthly repayment per €1,000 borrowed would go down so people would borrow more and that would push up prices.

But it's not the case because the Central Bank has rules which limit the size of the mortgage you can obtain, based on your income. So your mortgage will still be capped to the same level, you just won't have to pay as much per month.

salmagoo wrote: »

However the one massive benefit of these new oncomes is the ability to overpay 20% without getting charged an early payment fee! Now that is a sexy propositiion!

That has nothing to do with interest rates. Most people on a variable interest rate can overpay and shorten the life of their mortgage.

salmagoo

coylemj wrote: »

That would be the case if people could borrow based on the size of the monthly repayment. In which case what you say would apply - the monthly repayment per €1,000 borrowed would go down so people would borrow more and that would push up prices.

But it's not the case because the Central Bank has rules which limit the size of the mortgage you can obtain, based on your income. So your mortgage will still be capped to the same level, you just won't have to pay as much per month.

I agree with you except for the fact that there is a lot of ambiguity at the moment given that some people with covid payments are getting mortgages and some aren't. Therefore a lot of people that may not have gotten a mortgage may now be able to get it given that there is increased competition.



[/QUOTE]That has nothing to do with interest rates. Most people on a variable interest rate can overpay and shorten the life of their mortgage.[/QUOTE]

I never implied it had anything to do with interest rates! However what I am implying is that by overpaying (which depending on where you are at with your mortgage payments) you are paying off an element of capital which does affect how much total interest you pay.

Geuze

salmagoo wrote: »

However the one massive benefit of these new oncomes is the ability to overpay 20% without getting charged an early payment fee!

Please note that anybody with a variable rate mortgage can overpay as much as they like at any time, with no fees.

coylemj

I never implied it had anything to do with interest rates! However what I am implying is that by overpaying (which depending on where you are at with your mortgage payments) you are paying off an element of capital which does affect how much total interest you pay.

But you implied that it had something to do with interest rates - by posting that comment in this thread. Which is about a new entrant to the market who will charge a lower interest rate on mortgages.

If your point is that you can shorten your mortgage by availing of lower interest rates and then overpaying, it would be a lot simpler to just take out a mortgage with a shorter term in the first place.

PerryB78

Does anyone know when they are coming onto the market? Am holding off switching mortgage as these are supposedly offering rates sub 2%

lawrencesummers

PerryB78 wrote: »

Does anyone know when they are coming onto the market? Am holding off switching mortgage as these are supposedly offering rates sub 2%

Talk of a launch soon.
Only available through brokers and for people earning 80k/100k plus apparently

PerryB78

lawrencesummers wrote: »

Talk of a launch soon.
Only available through brokers and for people earning 80k/100k plus apparently

Thanks Lawrence I had just put my post up when I seen an email from the indo saying its launching today. Would that be 80-100k for a joint application do yoy know?

Explosive_Cornflake

If you were 2 years into a 5 years fixed, I assume it would cost a packet to change?

Darc19

7 year 1.95%, but max 60% loan to value

Other rates nothing special - just a tad lower

At the end of the day, you are paying for the defaulters and the system that allows a defaulter hang on without paying for several years and at the same time cost the banks tens of thousands in legal fees. Paid for by the decent customer.

This adds about 0.35% to every mortgage rate

Tefral

Im in the 60% or less LTV. Im just looking at their site now.

Seems like a no brainer for me to change now. Can't really see our banks here meeting that rate.

Davy

https://www.avantmoney.ie/mortgages


Rates 3/5/7 year:> https://www.avantmoney.ie/mortgages/rates

Geuze

lawrencesummers wrote: »

Talk of a launch soon.
Only available through brokers and for people earning 80k/100k plus apparently

Launched today.

The CEO denied they will "cherry-pick" on RTE radio 1 this morning.

https://www.askaboutmoney.com/threads/avant-money-launches-a-new-mortgage-today-from-2.219750/


AIB have responded by cutting fixed rates for low LTVs.

Geuze

https://www.askaboutmoney.com/threads/best-buy-tables-after-avants-entry.219753/

AAM Best Buys after Avant.

Geuze

https://askaboutmoney.com/threads/aib-the-first-to-cut-rates-in-response-to-avant.219751/

AIB response today.

Geuze

I understand that Avant will be quite selective in their underwriting.

For example, at present, they are considering only customers in Dublin, Cork or Galway.

And as they say in their press release:

Stable employment with no obvious risk to future employment prospects


Quote from AAM.