Tuesday 23 April 2019

Finance Ireland's home run: lender targets mortgages

Window shopping: A report last week said that non-bank lenders offer the greatest potential to drive down Irish mortgage prices. Photo: Bloomberg
Window shopping: A report last week said that non-bank lenders offer the greatest potential to drive down Irish mortgage prices. Photo: Bloomberg
Donal O'Donovan

Donal O'Donovan

Non-bank lender Finance Ireland will begin lending residential mortgages to new homebuyers from today, just over a year after announcing plans to break into the market.

The finance house, led by former Permanent TSB CEO Billy Kane, is the country's biggest non-bank provider of car finance and also lends to the commercial real estate and small business sectors.

The new mortgage range is targeted at mainstream residential mortgage borrowers and is available through brokers.

Finance Ireland entered the residential mortgage market in December when it bought Pepper's €200m residential mortgage book here.

The new lender said it will operate a loan-to-value (LTV) pricing policy allowing customers to access lower variable interest rates as the equity in their home rises as part of a "lifetime value" approach which it sees as an alternative to competing on price.

Mr Kane said the firm now challenges the main banks across a number of sectors including car finance, commercial property, SME and agri lending.

Challenger: Finance Ireland CEO Billy Kane says it aims to build a ‘substantial’ mortgage business
Challenger: Finance Ireland CEO Billy Kane says it aims to build a ‘substantial’ mortgage business

"Our goal is to build a substantial mortgage business based on long-term fair and transparent pricing combined with exceptional customer experience delivered via our appointed mortgage intermediaries," he said.

Finance Ireland's variable rate interest starts at 2.75pc for customers with less than 50pc LTV, rising to 3.15pc for 90pc or more LTV.

Fixed rates start from 2.55pc (3 years up to 60pc LTV)

The lender will offer variable and up to seven-year fixed rates, of up to €1.5m in size and to a maximum 35-year duration.

A report last week by the Department of Finance said that non-bank lenders offer the greatest potential to drive down Irish mortgage prices, because they are not forced to carry as much capital as traditional banks.

Irish Independent

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