Tuesday 18 June 2019

New lender enters Irish mortgage market

First-time buyers (Stock photo)
First-time buyers (Stock photo)
Charlie Weston

Charlie Weston

Non-bank lender Finance Ireland has signalled its intention to become a key player in the mortgage market with the purchase of the home-loan business of Pepper Money.

It plans to grow the Pepper mortgage book and is aiming to launch additional home-loan products in the new year.

The move is set to be a challenge to the existing lenders in the market and comes as An Post plans to enter the mortgage market in the new year, with credit unions ramping up their mortgage offering.

Headed up by former Permanent TSB executive Billy Kane, Finance Ireland will offer the loans to first-time buyers, movers and switchers.

However, it is not expected to undercut the existing banks, but will offer interest rates that are at the mid point between the highest and lowest on offer in the market.

The lender is a big player in the car finance market and has funding from the State’s Strategic Investment Fund.

It has acquired a €200m residential loan portfolio from Pepper Money, the Australian-owned lender that has a base in Shannon.

The loan book comprises of around 900 performing mortgages originated by Pepper in the last two years.

Pepper has mainly been targeting those who are refused loans from the mainstream banks because of a poor credit history or because they work from themselves.

After acquiring the mortgage book Mr Kane now wants to broaden the offering to compete with the main banks.

AIB and Bank of Ireland control around 60pc of the market between them.

Mr Kane said his company will use brokers to sell mortgages.

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