July 30, 2021

MP Now News

Mortgage News

Spanish bank to shake up mortgage market here with 30-year fixed-rate loans

Spanish owned mortgage provider In front Money has given its competitors a higher profile by offering a number of new long-term fixed rates.

The provider is the first to offer a 30-year fixed rate, which could change the mortgage market.

This means that the repayments will remain the same every month for the life of the loan.

Its new continental style offerings are priced between 15 and 30 years from just 2.25 pieces.

Avant Money’s line of new long-term fixed rates comes weeks after non-bank lender Finance Ireland surprised the market by launching an innovative 20-year mortgage.

Long-term fixes are a feature of mortgages on the continent, where interest rates of around 2 percent are common.

The latest moves mean that mortgage offers here are finally starting to resemble those in Spain and France, despite the impending exit of Ulster Bank and KBC.

Wholesale interest rates are at historic lows, with homeowners mainly entering into fixed interest rates over an increasingly long period of time.

This means that long-term fixed interest rates arouse interest among borrowers.

Now Avant Money has launched 15, 20, 25 and 30 year mortgages. Interest rates vary depending on the loan amount in relation to the value of the home, but are lower than most short term home loans.

An interest rate of 2.85 percent applies to those who borrow over 30 years and borrow 60 percent or less of the value of the home.

For those with a mortgage lending value of 80 percent, the interest rate rises to 3.1 percent. For borrowers over 15 years with a loan value of 60 percent, the new interest rate is 2.25 percent.

Avant Money, owned by Spanish Bankinter, shook the market here last September when it hit the market with the lowest interest rates. The lowest price is 1.95 pieces, significantly cheaper than its competitors.

Flexibilities are built into the new products. Avant Money will allow borrowers to overpay up to 10 percent.

Mortgage repayment fees are limited and flexible if you move. If you move, you can transfer the existing mortgage to a new home.

Loans can be repaid up to the age of 70.

Switchers and movers are expected to be the most likely to adopt the new products, but even first-time buyers with large deposits might find the assurance of a long-term solution appealing.

Brian Lande, Head of Mortgage at Avant Money, said the new offers would give Irish consumers the option of pegging themselves to fixed rates for their entire mortgage life at a time when interest rates are at historically low levels.

“I am also pleased to announce that we will be extending these new flexible features to all of our existing and new customers in our product range,” he said.

In May, Avant Money cut a number of its rates and introduced four- and ten-year fixed rates, which are the lowest on the market.

This is in addition to the lowest interest rate of 1.95 percent for those whose mortgages are 60 percent or less of the value of their homes.

Aggressive pricing will provide some relief to buyers and converters as Ireland continues to have some of the most expensive mortgages in the eurozone.

With the imminent departure of Ulster Bank and KBC, Avant Money aims to become the fourth largest mortgage provider after AIB, Bank of Ireland and Permanent TSB.