# Avant Money - new entrant



## shweeney (28 Jul 2020)

Avantcard to enter Irish mortgage market in the autumn
					

Association of Irish Mortgage Advisors says move is expected to be ‘market-changing’




					www.irishtimes.com
				






I mean we've heard all this "game changing" guff before - I'll believe it when I see it.
Whatever happened to Frank Mortgages who were going to shake things up a couple of years ago?


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## Brendan Burgess (28 Jul 2020)

That is interesting. 

I know that MBNA was a dreadful company to deal with.  I would not recommend them to anyone. I don't know if they have improved under Avantcard. 






						Key Post - How best to deal with MBNA if you can't pay the balance due
					

I am having problems with MBNA.  I have a credit card with a limit of €4,000 which I havent used for 2 years.   I was making weekly repayments for months but wasnt getting anywhere with it. The interest they are charging is massive and I just cannot keep up with it anymore.   I have on numerous...



					www.askaboutmoney.com
				




There certainly is an opportunity for someone to provide low Loan to Value mortgages at much reduced rates. 

Lending high LTVs such as in excess of 80% is too risky in Ireland when attempts to recover your money are frowned upon. 

Brendan


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## Brendan Burgess (28 Jul 2020)

I had a look at their credit card and was surprised to see that 



Built in and always-on cashback rewards without any hidden costs or any strings attached.
*1.25% cashback every month* on purchases. There's a few exceptions but not many.4



That looks great until you see that it's limited to €12 per statement. 

This sort of restriction should be highlighted up front and not shown as a footnote. 

It it says "always-on cashback" it should be always on and not off whenever you spend more than €1,000 

Brendan


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## Brendan Burgess (28 Jul 2020)

Not great on customer service. Two hours on the phone waiting to do a charge back 






						Avantcard chargeback link
					

Does anyone know how to do a chargeback on an Avantcard creditcard?  Ive fallen victim to Ryanairs no refund decision after they cancelled flights and I want to do a chargeback.



					www.askaboutmoney.com


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## Itchy (28 Jul 2020)

Brendan Burgess said:


> I had a look at their credit card and was surprised to see that
> 
> 
> 
> ...



That's exactly what I spotted today on their website today! "Always on" is surely false advertising here! An upper limit and a restriction on what counts is not always on!! Not giving me confidence at all.


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## MrEarl (29 Jul 2020)

Hard to see these guys disrupting the market - more likely to be a niche player, with mid table lending rates.

Their card services are okay, but little more than that. Limited online services, while their customer support is only available by phone and not 24/7 etc. Rates and benefits are hardly fantastic.


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## DeeKie (29 Jul 2020)

Brendan Burgess said:


> I had a look at their credit card and was surprised to see that
> 
> 
> 
> ...


You could complain to the CCPC. They should really be doing more about this sort of thing


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## Fire away (29 Jul 2020)

I have a credit card and personal loan with advantcard. Can only say good things about both experiences and also best rates on the market. Also one of the best rewards and balance transfers on market.  Customer service has been very good anytime I contacted them. I dont think a big Spanish bank are coming to ireland to be a niche player!!! Welcome 2% rates and below. The other banks will have to react so all good news


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## Itchy (29 Jul 2020)

DeeKie said:


> You could complain to the CCPC. They should really be doing more about this sort of thing




Apparently they are on board:

"Cashback Reward
Cashback is earned on retail and entertainment transactions. Cashback is credited to your account a month in arrears to a maximum value of €12 per statement. "Ireland's best always-on cashback rate on credit cards"; correct as of 10th March 2020,* source: ccpc.ie.*"



			https://www.avantcard.ie/credit-cards/rewardplus


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## qwerty5 (30 Jul 2020)

I've used them since the tesco card moved to them. I can't remember why I changed to their version of the reward card but the €12 limit per month wasn't hidden. I get the €12 most months as I put everything through the card.
Some transactions don't give cashback but again it was easy to find out which ones were excluded. 
Obviously if you don't pay the full amount every 2 months then the reward is pointless as you'll be paying cc interest.

Always found the customer service fine. I wanted to change my due date (to align it to just after pay day) and it was painless enough.


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## Boyd (30 Jul 2020)

They're mentioning sub 2% fixed rates, that IMO would be a shake up. Breaking 2% barrier IMO would be significant, as it seems to be a floor at the moment. I believe 2.2% is current lowest rate available in Ireland.


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## Johnno75 (2 Aug 2020)

They are likely to get off to a rocky start on the mortgages front if their past history is anything to go by.  They launched a new product a few years ago (Chill Money) which fell flat on its face and never really took off. Their systems for loan applications are in essence still paper based and cumbersome. The company has zero experience in the mortgage market which is considerably more labour intensive and technically complicated than issuing unsecured credit (for example with mortgages, the company  will have to take physical possession of deeds, deal with registering charges on properties, closings with Solicitors etc). I’m not one bit convinced they will make the grade if and when they pass muster with the Regulator and are permitted to issue mortgages.


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## Brendan Burgess (2 Aug 2020)

Hi Jay

If they introduce a mortgage below 2% , it would be a great help.  Even if their systems are poor and there is very little take up.

I hadn't realised that they were Chill Money.

Brendan


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## Johnno75 (2 Aug 2020)

Brendan Burgess said:


> I hadn't realised that they were Chill Money.
> 
> Brendan


Yes. Chill Money is the Credit Intermediary/Sales Agent for Avantcard DAC.


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## Brendan Burgess (2 Aug 2020)

Ah, that explains it.

I would have thought that they should now be promoting one name or the other. 

I had forgotten about MBNA and Avantcard.  

Brendan


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## RedOnion (2 Aug 2020)

Jayom75 said:


> The company has zero experience in the mortgage market which is considerably more labour intensive and technically complicated than issuing unsecured credit (for example with mortgages, the company will have to take physical possession of deeds, deal with registering charges on properties, closings with Solicitors etc). I’m not one bit convinced they will make the grade if and when they pass muster with the Regulator and are permitted to issue mortgages.


I find your entire post strange. Bankinter have a 76bn euro asset base. They're the 4th biggest bank in Spain, and recently launched an entirely digital mortgage product over there. I can only guess that they understand a thing or 2 about mortgages. 
The whole legal piece and registering charges, etc. believe it or not, that's what the borrower's solicitor does. All the bank really does is check up on it.
To base assumptions about how they might launch a mortgage product on a personal loan product offered through an intermediary, while under different ownership and during a period when the entire personal loan market in Ireland has collapsed is a bit naive.
If they price this product right, they will cause serious disruption in the market. As for their systems, and central bank regulation - just look at the existing players.


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## Johnno75 (2 Aug 2020)

RedOnion said:


> I find your entire post strange. Bankinter have a 76bn euro asset base. They're the 4th biggest bank in Spain, and recently launched an entirely digital mortgage product over there. I can only guess that they understand a thing or 2 about mortgages.
> The whole legal piece and registering charges, etc. believe it or not, that's what the borrower's solicitor does. All the bank really does is check up on it.
> To base assumptions about how they might launch a mortgage product on a personal loan product offered through an intermediary, while under different ownership and during a period when the entire personal loan market in Ireland has collapsed is a bit naive.
> If they price this product right, they will cause serious disruption in the market. As for their systems, and central bank regulation - just look at the existing players.


Naive?! I know more about the internal workings of certain institutions and property deals than your post suggests I do. But time will tell.


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## peemac (2 Aug 2020)

In fairness bankinter only took over Avant card 13 months ago and this is their start into the wider market. I don't think you can take the practices of a previous owner who probably knew they were selling and thus put zero investment in IT infrastructure and assume that a totally new owner would continue such archaic systems 

I would suspect that they will be at the forefront of digital banking rather than laggards as if they are going to have market leading rates they will have to ensure as much digitisation of the process as possible.


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## Johnno75 (2 Aug 2020)

It’s hardly a revolutionary stance to take into consideration a company’s past performance when assessing whether or not they will likely be successful in the future. Irrespective of the ownership.  

I wish them well, because Lord knows we need a competitive competent provider in the market.

But -

1. Avantcard are launching into a highly unstable market where the economic effects of Covid are unknown, but not at all promising at best. 
2. Bankinter might well know their stuff about mortgages in the Spanish market, but that does not automatically translate into their Irish subsidiary knowing their stuff in the Irish market, especially where the Irish company has no background in issuing mortgages. Moving (logistically) from issuing unsecured credit to mortgage credit is no small matter. 

3. Unless Bankinter manage to attract some exceptionally experienced staff to work for their Irish subsidiary who actually know about mortgage lending and business startup, and which staff are inclined to either relocate to Leitrim or use Leitrim as their business base, then they’re up against it.

Just sayin’.


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## RedOnion (3 Aug 2020)

Jayom75 said:


> Moving (logistically) from issuing unsecured credit to mortgage credit is no small matter.


You really are over complicating this.
Credit Unions have done it. It's really not that complicated.


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## Boyd (3 Aug 2020)

Let's imagine some utopian scenario that they offer 1.75% fixed for say 3 years, do ye think people would actually switch? I would obviously, but I'm in AAM! What about the people who have never switched and think you need to keep current/mortgage accounts at same institution?


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## Protocol (3 Aug 2020)

I would save 60 pm if I moved to 2%, so 720 pa.

Is that worth it?

There would be legal fees.

I either wait until my current fixed-rate period is up, or pay a breakage fee.


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## MrEarl (3 Aug 2020)

If (and its a big "if") they offer cheaper rates - the first and most obvious people to target, are those on SVRs with the other small banks - which may partially explain PTSBs recent move to reduce rates. That said, the danger group of people may be the hardest to shift, given they haven't moved for cheaper rates to date. 

Are BankInter awash with cash that they can't lend in Spain, to the extent that they are prepared to lend it at below market rates in a new marketplace, at a time where there are fundamental risks to the economy and Irish property prices? Its one thing entering the market, but it's another thing entering it in uncertain times, offering market breaking low rates.

Surely there are aware how difficult it is to get money back on a homeloan in Ireland, when things go wrong? That, in itself, justifies a higher risk premium than we see charged in other EU counties. 

Let's not forget what happened to other Banks that previously entered the Irish Market and lent money at rates below the market.


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## Itchy (4 Aug 2020)

Boyd said:


> Let's imagine some utopian scenario that they offer 1.75% fixed for say 3 years, do ye think people would actually switch? I would obviously, but I'm in AAM! What about the people who have never switched and think you need to keep current/mortgage accounts at same institution?



You can't underestimate the power of inertia or indecisiveness. The amount of posts on here, "should I fix at 3% for 3 years if interest rates are going down?" Well there's a 2.3% fixed for 2 years if you read the best buys? Mad stuff! At least the site is here to push the good word though. The more consumer activity (rather than inertia) the better for everyone. I can see the market going the way off the health insurance market, where people will become overwhelmed by the range of products on offer.


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## Brendan Burgess (4 Aug 2020)

Itchy said:


> I can see the market going the way off the health insurance market, where people will become overwhelmed by the range of products on offer.



Hi Itchy

But a mortgage should be easier to understand?   I find health insurance confusing.  What is actually covered? What are the excesses?  

But comparing rates is easier.    Cash back makes it complicated. And fixed or variable is a factor.  

But if you are paying 4.5% to Ulster Bank or Bank of Ireland, and Avant Money have a 2% rate, then it should be fairly clear. 

Brendan


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## peemac (4 Aug 2020)

They are very strong on long fixed rates in Spain.

20 years and 30 years at 2.5%-3% apr.

That would be a game changer.
€400,000 mortgage costing €1680/month guaranteed for life (based on 3% - 30years Rate in Spain is under 2.5%)


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## Sarenco (23 Aug 2020)

Interesting piece on the impact of the Avantcard announcement on the mortgage market.

Amazing to think that we could be looking at sub-2% fixed rates in the near future.









						Signs of competition as new lender enters market
					

It is not yet clear how the property market will respond to the economic fallout from Covid-19, but a picture of sorts is emerging.




					www.rte.ie


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## Johnno75 (23 Aug 2020)

Avantcard saw itself as a”disruptor” in the Personal Loans market when it launched loan products via Chill. It didn’t disrupt anything. (I’m not even sure what impact their own brand loan products are having on the market).

Avantcard now similarly sees itself as a disruptor in the Mortgage market by seeking to launch mortgages - via brokers. This will have limited impact, even if they manage to get to launch the mortgage product in a timely fashion. It’s the same formula that they tried with Chill, except now they are seeking to launch against an even more foreboding economic background.

A major problem they face is that they have no branches and accordingly are entirely reliant on contracted third parties to support and roll out their business proposition for them.

Far from straightforward.


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## skrooge (23 Aug 2020)

Sarenco said:


> Amazing to think that we could be looking at sub-2% fixed rates in the near future.





Jayom75 said:


> A major problem they face is that they have no branches and accordingly are entirely reliant on contracted third parties to support and roll out their business proposition for them.
> 
> Far from straightforward.



I can see them offering a no frills(sub) 2% fixed rate mortgage but with a lot of additional fees passed on to the borrower.  It may say 2% on the tin - and what a great marketing gimmick that will be -  but the effective rate will be more in line with other providers.


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## Brendan Burgess (23 Aug 2020)

We have to just wait and see.

A more natural model for mortgage pricing would be an admin fee upfront and a mortgage rate which would be generally higher for fixed rates than variable rates.  Rates should be lower for lower LTV whether the rate is fixed or variable.

Irish banks have it backwards to confuse people. They give out loans with cash back?  And the variable rates are kept at outrageous levels while the fixed rates are lower.  And in many cases the rate for a 90% mortgage is the same as for a 40% mortgage.

So there is an opportunity to lend profitably and sensibly in this market. 

It might be difficult to convince people that they should pay 1% up front rather than be paid 2% cash back. 

Brendan


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## Protocol (23 Aug 2020)

Looking at their rates in Spain, to get the best deal you must buy house insurance, life insurance, etc., from them.









						Fixed Interest Rate Mortgage | Bankinter
					

Bankinter




					www.bankinter.com
				




10 yr fixed = 2.80%, but as low as 1.50% with conditions.


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## Protocol (23 Aug 2020)

*10-year fixed-rate mortgage:* Here is an example of an APR mortgage offered by Bankinter, S.A., based on the following characteristics:
Mortgage amount: €150,000. Term of loan: 10 years (120 monthly repayments). APR: 2.32%. Monthly repayment for 10 years: €1,346.87. Final repayment: €1,347.22. Arrangement fee: 500 €. Total interest: €11,624.75. Interest rate: 1.50% (120 months). Monthly repayments. Total amount repayable: €167,849.11.

This APR has been calculated based on the following:
- Arrangement of life insurance for an amount of 150,000 Euros for 10 years for a 30-year-old person. Annual premium of €190.86. Renewable annual insurance.

- Home insurance policy with coverage of €100,000 plus home contents insurance for €30,000, and an estimated annual premium of €356.62. Renewable annual insurance.

- Appraisal costs: €249.56.

Interest rate subject to the borrower holding the following Bankinter products:

- Salary Account, Business Account or Non-Salary Account (discount of 0.50 percentage points).

- Life insurance covering 100% of the mortgage amount, taken out with Bankinter Seguros de Vida S.A. de Seguros y Reaseguros (discount of 0.60 percentage points).

- Comprehensive home insurance with minimum home contents coverage of €30,000 and structure coverage equivalent to the appraisal value of the property for insurance purposes, taken out with Línea Directa Aseguradora, S.A. and brokered by Bankinter, S.A., Operador de Banca-Seguro (discount of 0.10 percentage points).

- Pension plan/EPSV: have a pension plan/voluntary pension scheme in place with the company Bankinter Seguros de Vida, belonging to Bankinter, S.A. Group, for the entire term of the loan and make a minimum annual contribution to it of €600 (bonus of 0.10 percentage points).

These products are optional for the customer, but if they are not purchased the above rate (1.50%) will be increased by 1.30% corresponding to the sum of each of the products not purchased. Accordingly, if none of the conditions are met the fixed interest rate will be 2.80% (APR 3.24%). Monthly repayment for 10 years: €1,434.60. Final repayment: €1,435.18. Total interest: €22,152.58. Total amount repayable: €175,221.94. This APR has been calculated on the basis of taking out with Bankinter or a different provider the legally required home insurance policy for €100,000, with an estimated annual premium of €186.98, in addition to an annual maintenance fee of €45 for the current account required for collection of the repayments, the arrangement fee of €500 and appraisal costs of €249.56.

The monthly instalments (French repayment system) are the result of raising the coefficient (1 + interest) to the power of the number of outstanding instalments in the transaction multiplied by the interest, divided by (1 + interest) raised to the power of the outstanding instalments in the transaction, minus 1, all multiplied by the capital pending repayment ('interest' is understood to be the nominal interest rate offered divided by 12). The repayment obtained includes the amount of interest (result of dividing the interest rate by 12, multiplied by the pending capital) and amount repayable (result of subtracting the interest from the repayment).


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## Protocol (23 Aug 2020)

Main 10yr fixed rate = 2.80%

Less discounts;

Current a/c: -0.50%
Life ins: -0.60%
House ins: -0.10%
Pension plan: -0.10%

So the 2.8% drops to 1.50%.


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## skrooge (24 Aug 2020)

This is a nice summary




Protocol said:


> Main 10yr fixed rate = 2.80%
> 
> Less discounts;
> 
> ...



I think this is very informative. A discount for cross selling makes sense but given they'll be running a limit banking service here I would think any discount would be modest. 

As a new operation I think it would make sense for them to under cut existing rates by a modest amount. Be a market leader but avoid a massive influx of new business from day one.  build up the operational experience and then, maybe, look to expand more aggressively.  A similar approach was taken by bank of Scotland Ireland back in the day. 

It might not set the world on fire but that 10 year fixed rate offering of 2.8% would look to be the cheapest (before cashback) on the Irish market if it were introduced.

While they might be able to offer (sub) 2%, with the current market structure and level of competition, there's no reason for them to go straight for it. Their introduction will be a (welcome) step in the right direction... But only a step.


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## peemac (25 Aug 2020)

Jayom75 said:


> Avantcard saw itself as a”disruptor” in the Personal Loans market when it launched loan products via Chill. It didn’t disrupt anything. (I’m not even sure what impact their own brand loan products are having on the market).
> 
> Avantcard now similarly sees itself as a disruptor in the Mortgage market by seeking to launch mortgages - via brokers. This will have limited impact, even if they manage to get to launch the mortgage product in a timely fashion. It’s the same formula that they tried with Chill, except now they are seeking to launch against an even more foreboding economic background.
> 
> ...


You need to understand that they are under new ownership since then. 

It's now bankinter of Spain. 

I doubt if they will market the same products they have in Spain. It will be much like the current banks. 

My own guess is that they will come in with 10 & 15 year fixed rates of 2.5% - 3%.


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## Johnno75 (25 Aug 2020)

peemac said:


> You need to understand that they are under new ownership since then.


I fully understand the chain of ownership - from Bank of America, to Evo Banco (Apollo), to Bankinter. So what?

It’s still an Irish company operating under Irish CBI rules in the Irish market. Their current owners might be more willing to throw them into the mortgage market, and even throw some capital at them to get them started (considerably moreso than their previous Vulture Fund owners), but that doesn’t guarantee success.

It’s still a remotely located company with no branches operating through third parties seeking to get a slice of the action in a volatile market. They’ll probably do okay, but a disruptor? I think not.


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## Protocol (26 Aug 2020)

peemac said:


> I doubt if they will market the same products they have in Spain. It will be much like the current banks.
> 
> My own guess is that they will come in with 10 & 15 year fixed rates of 2.5% - 3%.



There is talk of sub-2%?

Surely 3-4-5 yr fixed terms are more common here?

So to have any impact they will have to offer 2/3/4/5 yr fixed rates?


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## Brendan Burgess (26 Aug 2020)

Protocol said:


> Surely 3-4-5 yr fixed terms are more common here?
> 
> So to have any impact they will have to offer 2/3/4/5 yr fixed rates?



Hi Protocol

That is the argument Irish banks used. "Irish consumers are not interested in long term fixed rates".  I always correct them : Irish consumers are not interested in the long-term fixed rates Irish banks charge.

If a lender offered a fixed rate of 2% for 10 years or 20 years , I would say that suddenly you would find Irish consumers love long term fixed rates. 

Brendan


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## pguyo (26 Aug 2020)

Brendan Burgess said:


> Hi Protocol
> 
> That is the argument Irish banks used. "Irish consumers are not interested in long term fixed rates".  I always correct them : Irish consumers are not interested in the long-term fixed rates Irish banks charge.
> 
> ...



I have 20 years left on my mortgage and I would take 20 year fixed at 2% all day long. I have a LTV around 35-40%. Hopefully if they do come in they will shake things up.


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## peemac (26 Aug 2020)

Protocol said:


> There is talk of sub-2%?
> 
> Surely 3-4-5 yr fixed terms are more common here?
> 
> So to have any impact they will have to offer 2/3/4/5 yr fixed rates?


I suspect that they will, but that space is crowded and 0.2%/0.3% difference to others is not a game changer

Offering a 15 year or 20 year fixed for under 3% would be a game changer and attract massive headlines

I've zero information, just an opinion.


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## Protocol (26 Aug 2020)

Here are their fixed rates in Spain, before discounts, and after all discounts:









						Fixed Interest Rate Mortgage | Bankinter
					

Bankinter




					www.bankinter.com
				




Up to 10 yrs = 2.80% ----- 1.50%

Up to 15 yrs = 2.90% ----- 1.60%

Up to 20 yrs = 2.99% ----- 1.69%

These are not APRs.

Taking their 10 yr rate, 2.8% is good, but won't shake up the market that much, as 2.2%-2.6% fixed is available here for shorter terms.

Now, if they offer discounts here for bundling other products, and go as low as 1.5%, well that would be a massive change.


*However, surely rates must be higher here than Spain, as banks must hold more capital against RWA here?*

See here:



			https://assets.gov.ie/6836/664f5174ebd34f7e938aea654bed6757.pdf


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## skrooge (27 Aug 2020)

Below is an example from BBVA. 





__





						Interest rate example over 15 years | BBVA
					






					www.bbva.es
				




Similar pricing structure to Bankinter - the more you purchase from the bank the cheaper your rate. Irish banks do this to varying degrees already. I.e., Cheaper rates for current account holders. Mortgage protection and house insurance are often offered as a package here. However, compared to Spain it appears to be all profit for banks here (you pay the same mortgage rate and probably over the odds for protection and insurance).  

For Avantmoney to offer a similar discounts as in Spain they will look to make money off you in other ways. What extra services are Avant money planning on launching?

For Bankinter to divert funds from Spain and want to lend here they most see some marginal gains compared to their existing Spanish business. I doubt they're looking to increase competition more take advantage of the lack of it in Ireland. They'll shake up the market as much as as ICS/Dilosk and Finance Ireland have. To go to all that trouble and expense they're not going to offer Spanish rates.


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## Brendan Burgess (14 Sep 2020)

__





						Avant Money launches a new mortgage today from < 2%
					

Just on Breakfast Business on Newstalk this morning. Fixed Rates from 1.95% and Variable from 2.5%. No further detail than that but will be announced today apparently.



					askaboutmoney.com


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