Avantcard to target high earners only

Brendan Burgess

Brendan Burgess

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According to Niall Brady in the Sunday Times

www.thetimes.co.uk

Avantcard limits cheap home loans to higher earners

Consumer finance specialist Avantcard plans to cherry-pick the mortgagemarket, limiting its cheap rates to public servants, medical professionals and other high
www.thetimes.co.uk www.thetimes.co.uk

Consumer finance specialist Avantcard plans to cherry-pick the mortgage market, limiting its cheap rates to public servants, medical professionals and other high earners in secure employment, according to sources familiar with its plans.

The Spanish-owned credit card provider has signed up about six mortgage brokers for a pilot launch in October, telling them that it will undercut the mainstream banks’ best deals by an average of 0.2 percentage points.

Hopes of a mortgage price war have been dashed, however, because Avantcard has told the brokers its target market will be confined to public servants and medics, two of the few occupations where jobs and earnings are insulated from the economic crisis sparked by the Covid-19 pandemic.

Borrowers must earn at least €80,000-€100,000, the brokers have been told.

This makes absolute sense.

They will be large mortgages
They won't have to worry too much about the difficulty in repossessing a home
They will get a very high mortgage rate compared to what they are getting in other Eurozone countries

I had suggested a new lender should target maximum 70% LTV mortgages to avoid the "no repossessions" mentality in Ireland.
But this should work as well.

Brendan
 
Brendan Burgess said:
This makes absolute sense.
Click to expand...
Yes it does, and is an eminently sensible and risk-averse initial approach from Avantcard.

But it has now positioned itself as a niche provider.

Not great for the average mortgage consumer, and far from disruptive.

Looks like they've learned their lesson from previous campaigns into the credit market.
 
When BoSI arrived here, they were very conservative and so were Danske with their trackers.

But they relaxed their conservativeness and became as reckless as the rest.

Brendan
 
Hi Itchy

Depends.

You don't have to pay your solicitor every year. The saving might be every year.

And if they give a longer term fixed rate which is lower than the current rates, people might be tempted.

But there is very little switching anyway, so it might be just for people who are trading up.

Brendan
 
Hi NRC

They are clearly going to be very conservative in their lending. I would guess that public servants and medics have much lower default rates.

They will probably do lower than average LTVs as well.

It's a question of the total risk. Some will get into difficulty but much fewer than the general reckless lending that is going on at the moment.

Brendan
 
Beating existing best deals by 0.2%.................disappointing.

What is the current best deal?

Isn't there a 2.2% fixed available from UB, but only on large loans?
 
It would be great if a new entrant came into the market and offered FTBs 90% LTV mortgages at 5 times earnings at 1.5%.

But it's not going to happen. More competition will bring down rates slowly. That is better than no change.

Brendan
 
Brendan Burgess said:
They are clearly going to be very conservative in their lending. I would guess that public servants and medics have much lower default rates.

They will probably do lower than average LTVs as well.

It's a question of the total risk. Some will get into difficulty but much fewer than the general reckless lending that is going on at the moment.
Click to expand...

Indeed, I had misunderstood you.


Anyone entering the Irish market will be doing so with their eyes fully open. The potential for wide-scale default wouldn't have been apparent for an entrant in (for example) 2005.
 
Any idea what they will perceive as a high value mortgage?

Will be ready to switch again in May, would like to do a few cash backs again and then settle on these if they have the lowest interest rate. A 5 year fixed at 2% I wouldn’t turn my nose up at
 
Brendan Burgess said:
According to Niall Brady in the Sunday Times

www.thetimes.co.uk

Avantcard limits cheap home loans to higher earners

Consumer finance specialist Avantcard plans to cherry-pick the mortgagemarket, limiting its cheap rates to public servants, medical professionals and other high
www.thetimes.co.uk www.thetimes.co.uk

Consumer finance specialist Avantcard plans to cherry-pick the mortgage market, limiting its cheap rates to public servants, medical professionals and other high earners in secure employment, according to sources familiar with its plans.

The Spanish-owned credit card provider has signed up about six mortgage brokers for a pilot launch in October, telling them that it will undercut the mainstream banks’ best deals by an average of 0.2 percentage points.

Hopes of a mortgage price war have been dashed, however, because Avantcard has told the brokers its target market will be confined to public servants and medics, two of the few occupations where jobs and earnings are insulated from the economic crisis sparked by the Covid-19 pandemic.

Borrowers must earn at least €80,000-€100,000, the brokers have been told.

This makes absolute sense.

They will be large mortgages
They won't have to worry too much about the difficulty in repossessing a home
They will get a very high mortgage rate compared to what they are getting in other Eurozone countries

I had suggested a new lender should target maximum 70% LTV mortgages to avoid the "no repossessions" mentality in Ireland.
But this should work as well.

Brendan
Click to expand...

I can't read the full article as I am not a subscriber but is this not for the UK market? Does it mention Ireland in the article?
 
Well it was in the Irish edition.
They talk about salaries in euro

And other papers have reported that Avant Money is planning to launch a mortgage product in Ireland.

So don't know why you think it's the UK?

Brendan
 
Avantcard are an Irish company with no branches in the UK. The article was in the Ireland section of the Sunday Times.
 
Last edited:
Brendan Burgess said:
So don't know why you think it's the UK?
Click to expand...

The Times Ireland edition uses a .co.uk extension and not a .ie one.


It is the only news organisation to my knowledge with journalists in Ireland writing stories about Ireland but using urls which are typical for the UK.

It is a bit confusing.
 
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