Mortgages

Finance Ireland launches new mortgage products

Daragh Cassidy

Daragh Cassidy

Head Writer

Finance Ireland has launched a range of new mortgage products as it seeks to compete with the main banks. So how competitive are its rates and is this good news for mortgage holders?

Who is Finance Ireland?  

Finance Ireland was set up in 2002 and is Ireland’s largest non-bank lender. It has offered car finance and loans to small businesses for some time and it entered the Irish mortgage market last year when it took over the mortgage loan book of Pepper Money.

What’s new?

This week Finance Ireland announced a range of new mortgage products.

The lender will offer variable rates from as low as 2.75% as well as fixed rates over three, five and seven years - making Finance Ireland only the third lender in the country to offer a fixed rate over seven years.  

The lender isn’t offering any type of cashback incentives for now, choosing to focus on its rates instead.

The so-called key selling point for Finance Ireland is that it will offer customers lower interest rates over the lifetime of their mortgage as the value of their loan decreases in relation to the value of the property (what’s called the loan-to-value or LTV ratio).

So let’s say you buy a house for €300,000 and have a deposit of €30,000. This means your LTV would be 90% so your interest rate, if you choose a variable rate, would be 3.15%. But over the years as the value of your home increases and/or you pay off some of your mortgage, your LTV may fall below 50%. In this instance you’ll be able to get a lower interest rate of 2.75%, potentially saving you hundreds on your mortgage repayments each year.      

In order to get a lower interest rate you’ll need to get your house valued by a professional valuer, which usually costs around €150 though in some cases may be paid for by the lender.  

What interest rates is Finance Ireland offering?

Variable rates  

Loan-to-value ratio

Interest rate*

≥ 50%

2.75%

≥ 60%

2.95%

≥ 70%

2.95%

≥ 80%

2.95%

≥ 90%

3.15%

3-year fixed rate 

Loan-to-value ratio

Interest rate*

≥ 50%

2.55%

≥ 60%

2.55%

≥ 70%

2.60%

≥ 80%

2.60%

≥ 90%

2.65%

5-year fixed rate 

Loan-to-value ratio

Interest rate*

≥ 50%

2.60%

≥ 60%

2.60%

≥ 70%

2.65%

≥ 80%

2.65%

≥ 90%

2.80%

7-year fixed rate  

Loan-to-value ratio

Interest rate*

≥ 50%

2.95%

≥ 60%

2.95%

≥ 70%

3.40%

≥ 80%

3.40%

≥ 90%

3.60%

*customers can change interest rate during the lifetime of their mortgage as their LTV improves.  


Is this good news for mortgage holders?

Anything which increases choice for consumers is a good thing and the option of a longer-term, seven-year fixed rate is to be welcomed as only two other banks currently offer this in Ireland.

However the interest rates on offer from Finance Ireland, although highly competitive, don’t undercut any of the existing players in the market.

Also, the so-called key selling point from Finance Ireland - lower rates as the LTV of your mortgage improves - is available with most banks anyway, although many customers don’t realise this!

So if you currently have a mortgage make sure to contact your bank to see if you could avail of a lower interest rate based on the current value of your property. Most banks allow you to move onto a lower rate at least once during the term of your mortgage and under new Central Bank requirements, banks must write to customers at least once a year to let them know if they can do this.         

And of course, before you make any decisions make sure you compare interest rates and offers across all lenders on bonkers.ie with our free and easy-to-use mortgage calculator.

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