Mortgage price war breaks out as another lender cuts its rates

Avant Money is cutting all its lending rates, while its parent Bankinter is set to establish a full banking operation in Ireland.

The Spanish bank owns Leitrim-based mortgage lender Avant Money, which has proven to be successful over the past six years of its ownership.

Leitrim-based Avant Money is reducing its mortgage rates by up to 0.45 percentage points.

It is also introducing a cashback offer worth 1pc of the mortgage being drawn down for a limited period to entice switchers.

The incentive would amount to €4,000 on a €400,000 mortgage.

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The move will see its best rate falling to 3.6pc for a four-year fixed for those with a loan to value of 80pc or less. This is down from 3.8pc

The four-year rate goes to 3.80pc for loan to values of more than 80pc.

Other fixed rates are being reduced, including the One Mortgage rate which is fixed for life,

Head of mortgages at Avant Money Brian Lande said: “Our fixed rates are reducing by up to 0.45 percentage points and our simplified pricing provides even better value to customers across our full range.”

Managing director of mortgage broker Doddl.ie Martina Hennessy said Avant Money’s four-year fixed at 3.6pc is the lowest non-green rate on the market and is available for all mortgage levels.

She said Avant Money’s new rate and switcher proposition will be extremely attractive to the thousands of mortgage holders rolling off fixed rates in the next 12 months.

“With rates in the Irish market now ranging from 3.45pc to 7.15pc gone are the days where you accept the first rate your current lender offers you,” she said.

There are now 10 lenders in the Irish mortgage market and it is imperative that those seeking out a new mortgage or rolling off a fixed rate do their research or get market based advice from a broker, Ms Hennessy said.

The move by Avant Money to cut its mortgage rates comes after AIB Group cut its “green” mortgage rates for homes with a Building Energy Rating (BER) of B3 or better.

Earlier this week AIB, EBS and Haven also upped the cash incentive for switchers from €2,000 to €3,000.

And Bank of Ireland has introduced a range of discounts on its fixed rates for those with BER of any kind, not just B3 or better. It also introduced a new flat variable rate rather than a range of variable rates.

And PSTB has cut some of its fixed rates.

Moves to cut mortgage rates come ahead of an expected European Central Bank (ECB) rate cut in June.

And there will be a “technical” adjustment to its rates in September set to benefit tracker holders as it will see the ECB refinancing rate reduced by 0.35 percentage points.

The rates war is great news for the 70,000 and 80,000 mortgage holders who are completing their fixed-rate period this year.

Many of them locked in at rates as low as 2pc, but are now faced with a market where typical fixed rates are at least double that.

Avant Money’s latest rate reduction and the move by AIB Group to increase its incentive to switchers is a sign the switcher market is set to heat up.

In May last year Avant Money reduced the rates it charges for those who opt to fix for the life of their loan.

Avant Money also increased some of its shorter-term fixed rates, but is reduced its long-term One Mortgage rates in a bid to get more people to switch.