Key Post Indo: Credit unions take on banks with some of the lowest mortgage rates in the Irish market

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Credit unions take on banks with some of the lowest mortgage rates in the Irish market

Credit unions around the country have emerged as offering some of the cheapest mortgages.
m.independent.ie m.independent.ie
(I'm deliberately not copying/pasting the full article to respect copyright - hopefully it doesn't become paywalled).
Loan rates as low as 2.95pc are now available from some credit unions, which is far below than anything from the three mainstream banks or the non-bank lenders.

A major analysis of mortgage offerings by the sector carried out by the Irish Independent shows almost half of the State’s 205 active credit unions are now offering mortgages, to both first-time buyers and to switchers.
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The table is interesting. I am not sure how representative it is. Credit Union mortgage rates tended to be higher than the banks. But this may have changed since the banks raised their rates.

1684307103987.png
 
I checked Savvi as it covers a lot people in Dublin

savvi.ie

Mortgages | Quick & Easy Application | Savvi Credit Union

Invest in your future with our mortgage loans today. Find the perfect plan for your dream home. Competitive rates & expert guidance. Get started today!
savvi.ie savvi.ie

A variable rate of 3.25% is attractive now. The problem is what is their mortgage rate policy? We have no idea. As it's funded by free deposits ( because they are paying little or no interest) it shouldn't rise. But one would never know.

Brendan
 
I came across Core CU in South Dublin a few days ago and they seem to be doing 35 year fixed rates @5%!! That must be the only such product in the state? https://www.corecu.ie/mortgages/
  • Borrow between €40K and €350K
  • Terms Available: 1 year to 35 years
  • Fixed Interest Rate: 5% fixed rate for the duration of the mortgage
 
Thought I'd add we have our mortgage with the CU and it's working for us so far. But we are overpaying by 25-30% every month. They are flexible as long as we do the min payment, I can even go in and throw some cash off it in branch if I like just like a normal credit union loan. I don't think it might work for everyone.
At the time when we took it out the rate was 4%. Its since dropped to 3.5%.
They only offer variable rate.
 
Seems very flexible. They’re also the type of entities that could do something like those old “offset mortgages” which were great.
 
I am currently in the process of switching my mortgage to my CU. Rate is 3.75% based on my LTV but they have confirmed that any rate cut is passed on to existing customers.
 
I'm thinking out loud here.

Could some/many CU combine to use deposits to finance mortgages not tied to a local branch?

One national lender with a range of fixed/variable mortgages, with one set of rates, yet financed by deposits drawn from dozens of CU?

One central management of all the mortgages.
 
Hi Protocol

I suggested that a few times, including a presentation to a CU conference in 2016

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And here again, a year later

Central Bank to relax rules on Credit Unions giving mortgages?

Credit unions to take on banks with mortgage lending offers https://www.independent.ie/business/personal-finance/credit-unions-to-take-on-banks-with-mortgage-lending-offers-36420248.html Loan rates are expected to be in line with the average offered by banks, but will not undercut them, a...
www.askaboutmoney.com
 
Protocol said:
One national lender with a range of fixed/variable mortgages, with one set of rates, yet financed by deposits drawn from dozens of CU?
Click to expand...
That's kind of what an BoI or AIB mortgage is :) Credit unions have billions in deposits that they can't lend out, most of which are parked with retail banks. My BoI mortgage is funded indirectly by CU savers.

Otherwise AFAIK the legal framework doesn't allow credit unions to pool their resources and grant loans that way.

@Brendan Burgess - I think your suggestion makes sense but I don't think they are allowed to do it.
 
NoRegretsCoyote said:
Otherwise AFAIK the legal framework doesn't allow credit unions to pool their resources and grant loans that way.

@Brendan Burgess - I think your suggestion makes sense but I don't think they are allowed to do it.
Click to expand...

The new credit union bill, if enacted, will allow for this via the creation of "corporate credit unions" (short explainer from ByrneWallace here). It is also being examined at representative body level as far as I know. I think that idea is to allow for a combo of on and off-balance sheet mortgage lending via a building society-type set up.
 
Such a shame as stated in the credit union mortgage rates thread that most credit unions are over subscribed now and have closed the mortgage books
 
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