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Avant Money, the Leitrim-based consumer finance company, has started taking applications for its products starting Monday with a fixed-rate mortgage offering that is the lowest on the market.
Avant Money, formerly known as Avantcard, is based in Carrick on Shannon with a second office in Dublin. It is owned by the Spanish banking group Bankinter and has been providing consumer finance products to Irish consumers for more than 20 years.
The company was born out of the American credit card company MBNA, which had a substantial presence in Carrick-on-Shannon, employing more than 1,000 people, before withdrawing from the market in 2012.
The company announced that it would enter the Irish mortgage market in July. It confirmed on Monday that its new mortgage products are now available to Irish customers, with fixed-rate mortgages starting at 1.95 percent, which is the lowest rate on the market.
Avant Money is also bringing additional competition to the Irish mortgage market with its new three, five and seven year fixed rate products.
Mortgages will be available to all customers, subject to the Central Bank of Ireland’s normal lending rules on loan-to-value and loan-to-income. Avant has designated several brokers to process the requests.
In response to the Avant Money offer, AIB has introduced a new range of mortgages that includes a fixed loan-to-value rate of 2.25 percent.
Customers with AIB’s current variable rate of 2.75 percent would save € 41 on their monthly repayments if they switched to a five-year green fixed rate of 2.25 percent.
The calculation is based on a 25-year mortgage with a remaining balance of € 160,000, a property valued at € 350,000 and a loan-to-value ratio of less than 50 percent.
Similarly, customers who currently have a standard variable rate of 3.15 percent would save € 89 on their monthly repayments if they switched to a 3-year fixed rate of 2.45 percent.
The calculation is based on a 25-year mortgage with a remaining balance of € 250,000, a property valued at € 350,000 and a loan-to-value ratio of between 50% and 80%.
Central Bank retail interest rate statistics show that the weighted average mortgage rate rose three basis points in July to 2.82 percent.
The average rate of the new fixed rate agreements fell one basis point to 2.67 percent, a low of the new series, while the new average variable rate increased 24 basis points to 3.44%.
In total, the fixed-rate business accounted for 76 percent of all new deals in the three months through July. The total volume of new mortgage contracts amounted to 556 million euros, a decrease of 35 percent in the year but 13 percent more than the previous month.
Joey Sheahan, chief credit officer at MyMortgages.ie, said Avant Money’s entry into the Irish market was the “best news” for Irish mortgage holders.
“We have long seen European rates well below 2% compared to close to 3% for Irish mortgage holders, and now, for the first time since before 2008, rates below 2% are available to homeowners in Ireland, ”he said. .
“It’s an opportunity that presents itself once in a decade or maybe even two decades where a new lender enters the Irish market and cuts interest rates to this point.
“We are delighted to be one of the Avant Money partners and our advice to mortgage holders is that now is the time to review your current mortgage, even if you have recently.
“A mortgage holder with 300,000 euros outstanding with 32 years remaining and a loan worth less than 60 percent can save 158 euros per month or 60,000 euros during the term of the mortgage if he reduces the interest rate of 2.95 percent at 1.95 percent. “
Chris Paul, Avant Money Executive, said: “We are confident that our products and rates will be attractive to Irish customers who have been neglected for too long when it comes to their mortgages.
“Unlike other providers, we have avoided short-term gimmicks like cash-back offers in favor of products and rates geared toward providing true, measurable savings over the life of a typical mortgage.”
Public Spending Minister Michael McGrath said the additional competition was good news for Irish home buyers.
“Mortgage rates in Ireland have been falling for a while, but they are still much higher than most countries in the eurozone,” he said.
“The news today of a new entrant with low rates and rate reductions from existing lenders is very good news for consumers.”
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