Skip to main content

What Is The Current Situation

Europe’s post-Covid-19 economic environment has been much more challenging since the Russian invasion of Ukraine in February 2022. European consumers are paying vastly more for fuel, energy, food, and services. Eurostat has stated the annual inflation rate hit 9.9 per cent in October 2022. The considerable rise in inflation rates has forced the European Central Bank to impose seven successive interest rate hikes since the Summer of 2022. The ECB has increased the rate by 375 basis points since July 2022.

More rate rises are expected into the end of 2023 as the ECB aims to bring the inflation rate down to its 2% target. The latest increase rate increase was introduced in early May, which means the current rates stand at:

  • Primary refinancing rate: 3.75%
  • Marginal lending rate: 4% 
  • Deposit interest rate: 3.25%

What has Avant Money Announced

On the 25th of May 2023, Avant Money became the first Irish mortgage lender to reduce its mortgage rates for customers who wish to fix their rate for the entire term of their loan. Avant Money is so far the only Irish mortgage provider that has cut mortgage rates since the ECB began rate rises in July 2022. Irish mortgage holders have been hit with seven rate increases in the last year, adding to the financial stress on families nationwide.

For the last decade, many Irish mortgage holders lucky enough to possess a tracker mortgage enjoyed very low-interest rates. However, the situation has now reversed, with many Irish tracker mortgages paying between 4% upwards on their mortgages. 

Avant Money is betting that many Irish mortgage holders will be enticed by their offer to fix their mortgage rate at 3.95% until the end of their loan. To this end, they have launched the One Mortgage product, which allows customers to fix their mortgage rate for the entire loan period. With the prospect of further rising rates, this offer might be a compelling choice for those borrowers looking to safeguard against further increases. 

What Is The One Mortgage

The Avant One Mortgage offers customers interest rates as low as 3.95% for the entire length of their mortgage. Avant Money hopes the offer will attract new mortgage customers and current mortgage holders to switch to this new product. Below are some of the features of the One Mortgage:

3-Month Rate Guarantee: Avant Money is introducing a new feature to the product, which guarantees anyone who gets a One Mortgage loan offer will have the rate for three months. Rival mortgage providers will only allow borrowers and switchers to get the interest rate when they draw down on the mortgage. House purchases in Ireland can take months to conclude, meaning that borrowers will likely face higher rates when they draw down compared to the rate they received when they were first granted loan approval. 

Legal Fees: Avant Money promises to pay up to €1,500 to cover the legal fees for those switching to the One Mortgage product (available for applications received until 29 September 2023 on mortgages of > €200,000).

Loan To Value: The interest rates available on the One Mortgage will vary depending on the borrower’s loan-to-value ratio. Customers with a 60% or less loan-to-value ratio will receive a rate of 3.95%, while customers with a 90% loan-to-value ratio will receive a rate of 4.10%.

Overpay:

  • You can choose to overpay 10% of the balance each year.
  • Early redemption fee waived or refunded for home movers.
  • Subject to meeting their qualifying conditions, you may be eligible for a waiver or refund of your early redemption fee.  

Why Choose All Financials?

A mortgage is a substantial financial commitment, and the mortgage process can be complicated, with many variants to consider when choosing the right loan and provider. Our team of mortgage advisors can help you choose the right option for you based on your circumstances. 

  • We offer expert advice on the range of providers and products available in the mortgage market.
  • We navigate you through the mortgage process and guide you through the paperwork and requirements.
  • Our online mortgage application portal simplifies the gathering of documentation needed for the application process. It lets you know what and how to upload to the system. This cuts down on paper and supports our sustainability efforts. Of course, if you are not technically inclined, we can accept hard copies of the documentation. Whatever works best for you.  
  • We charge no professional advice fees to you, the customer, however, we are paid a commission from the bank upon the drawdown of your mortgage. 

Author: Fran Cooke

franfinan

franfinan

Fran specialises in finance products – Pensions, Life & Mortgages advising both individuals and corporates throughout Ireland. Fran holds qualifications and accreditations from Maynooth University and the Life Insurance Association (LIA) in Financial Services. Fran recently completed the Special Investment Advisor (SIA) course and is currently refreshing his pensions knowledge with the Retirement Planning Adviser (RPA) accreditation.