Avant Money launches a new mortgage today from < 2%

peemac said:
0.2% difference in what is on the market already
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Hi peemac

What is the next cheapest 7 year fixed rate after Avant?

KBC 2.45% for 5 years
KBC 2.85% for 10 years
Ulster Bank 2.99% for 7 years

So 1.95% for 7 years is a big cut.

Even 2.4% for 7 years <80% is probably a good bit cheaper than the rest of the market.

So Avant is game changing
1) For LTVs below 60%
2) For 7 year fixed rate mortgages.

Brendan
 
This applies for a very small cohort and I would not see it as a game changer.

But a 90% LTV and 15 year fixed option at about 2.5% would have a game changer especially for younger couples as they could budget their expenditure long term.
 
no switching incentive is an issue. For me to switch to KBC I get 3K back, say 1.7K after the legal fees; the difference between 2.25% and 1.95% is about €300 per annum for me so I'd need to stay with Avant for 5+ years and assume rates don't fall further to come out ahead of switching to KBC...

AIB have already reacted, KBC may also drop rates...
 
Brendan Burgess said:
So Avant is game changing
1) For LTVs below 60%
2) For 7 year fixed rate mortgages.
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peemac said:
This applies for a very small cohort and I would not see it as a game changer.
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That is not a small cohort at all.

Huge numbers of people have LTVs below 60%.

peemac said:
I think they missed an opportunity to bring 10 year and 15 year fixed rates at 2.5% or lower.
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Personally, I would much prefer a 7 year rate of 1.95% to a 10 year rate of 2.5%.

This is a game changer for most people if they can be bothered to switch.

Brendan
 
peemac said:
This applies for a very small cohort and I would not see it as a game changer.
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Given the very significant increases in residential property prices since 2012/13, I would imagine that there is actually a fairly large cohort of mortgage borrowers with 40%+ of equity in their PPR.

This move by Avant Money is very definitely a game changer for low-LTV mortgages.
 
shweeney said:
I know people like peace of mind but rates are only going one way over the next few years (down) - I'd be reluctant to fix for a long period.
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Without the benefit of a crystal ball, I don't see how you could possibly make that statement with any confidence.
 
Sarenco said:
Without the benefit of a crystal ball, I don't see how you could possibly make that statement with any confidence.
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OK, but I've been hearing for years it's only a matter of time before ECB rates start rising; it hasn't happened and with the pandemic seemingly with us for another year at least it's hard to see them rising anytime soon. Those ultra low rates have been slow to reach the Irish mortgage market but rates have been slowly dropping, they're certainly not going up. That's just my personal opinion, I've always been wary of fixed rates because you're effectively betting against the bank, but with fixed now where the competition is happening I'd be reluctant to fix for more than say 2 years.,
 
Does Avant not change this given you could get 1.95% fixed for 7? Have to say I find it very hard to see rates dropping much below that.
 
Blackrock1 said:
its not a no brainer, if there is no ability to overpay and no switching inducement (so you have legal fees) then you need to make sure the numbers work for you
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You can always have part of your mortgage at a variable rate of 2.5% that you can pay off as you see fit.

In any event, break fees will always be less than the interest that you would save by paying off early.

The legal fees/costs for switching will fade into insignificance for most borrowers if they result in a 50bps+ cut to their mortgage rate.
 

How can they claim to be not "cherry picking" customers which is a direct quote from the interview this morning and then only consider customers from three cities. Surely thats the very definition of cherry picking??
 
NoRegretsCoyote said:
Indeed, but many of them will have 10 years or less remaining on the term.
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OK, that will narrow it down a bit.
But a lot of people took out 30 year mortgages in 2010 and so have 20 years left.

House prices have increased since then.
They have paid down capital.

So I would still think that it's a big enough cohort.

If you have 100k left with only 7 years to go you will save €3,500 interest if you get a 1% reduction.

But in the first year, you will save €1,000 which will cover the legal costs.

So I think it's still worth doing.

Clearly, if you have €50k left with two years to go, it's not worth switching to another lender.

Brendan
 
Deeks1 said:
How can they claim to be not "cherry picking" customers which is a direct quote from the interview this morning
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Yes, they are cherry picking and they are dead right to do so.

I remember attending the repossession court in Donegal. A full day long session. Only about half of the cases reached. No orders granted. I am not sure, but I think that outside Dublin and Cork , the person granting the order for possession is also the person who would have to enforce it.

I suggested to a couple of bankers afterwards that they should announce very publicly no further mortgage lending in Donegal or Kerry until it was possible to enforce their security. Kerry apparently was as lawless as Donegal.

So lending to two or three cities and being competitive at less than 60% LTV makes sense.

Brendan
 

I get that and can totally see the point. However they specified on the radio this morning that they were categorically not cherry picking which is complete rubbish as it turns out. Doesn't bode too well for the future if their first announcement is a sham.
 
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