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Tuesday 30 September 2014

Two more lenders set to resume providing mortgages

Charlie Weston Personal Finance Editor

Published 15/12/2012 | 05:00

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THE mortgage market is set for a boost, with EBS and Permanent TSB preparing to resume lending to home buyers.

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That will bring the number of lenders to half-a-dozen, up from only two.

Up to a year ago, the only banks providing mortgages for first-time buyers and movers were AIB and Bank of Ireland.

But now it has emerged that Permanent TSB will start mortgage lending again next year, while former building society EBS is increasing its lending activity.

Since EBS was taken over by AIB it has unofficially withdrawn from the lending market, said Karl Deeter of Irish Mortgage Brokers.

It is now offering mortgages, along with its broker division Haven, with loans of up to 92pc of the value of the property being approved. This means buyers need to have a deposit of at least 8pc.

A spokeswoman for EBS said yesterday: "EBS is open for mortgage business and is committed to supporting our customers with their mortgage needs and the mortgage market."

But Mr Deeter warned that the interest rates charged by EBS and AIB varied.

"AIB has a rate far lower than EBS, yet they are both funded from the same place and they will both work off the same credit policy," he said.

EBS has a variable rate of 4.45pc while AIB charges 4.24pc.

Permanent TSB, which has not been lending to new buyers or movers for several years, will offer mortgages again in the new year.

Trevor Grant of the Association of Expert Mortgage Advisers said the residential mortgage market now had AIB, Bank of Ireland and its subsidiary ICS and Ulster Bank.

"KBC is also lending, but you need a 20pc deposit, and most borrowers do not have this. There is an increased availability of credit which is welcome.

"EBS have tentatively started lending, and we also understand that PTSB may return to the market early in the new year, which would be another boost."

Figures last month from the Irish Banking Federation showed that close to 4,000 new home loans were approved by banks in July, August and September.

This was a rise of more than 10pc on the same period last year, and a rise of 23pc on the second quarter of this year.

In was the first annual rise in the number of mortgages drawn downs since 2006.

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