New mortgage lender to shake up market

Nothing seems to have changed on Frank's website in the last few months - has there been any updates (I didn't register to receive them :oops:)
 
Any updates on this? I've been holding on a waiting like others. In the meantime KBC are now offering me 3.0% vs the 3.3% I pay EBS so could make significant savings and tempted to switch. It's almost the 'New Year' now.....or will this drag on for another 6-12 months I wonder?
 
Wondering this also. About to sign a 1 year fixed at 2.9% with kbc but if frank were to be offering 2.8% I'd rather switch and give them my money than kbc
 
The last I heard was that the Central Bank seemed to be happy enough - it took them a year to become happy to approve a lender who wanted to cut mortgage rates. I am not sure if this "happy enough" means that they have granted official approval.

The issue now is whether the business model is still viable . They would have been able to offer a lower mortgage rate and get a small share of the market and still be profitable. With rates cut generally in the last year and Irish consumers virtually refusing to switch to cheaper lenders, it may no longer be a viable business model. Or more correctly, it would take longer to become viable.

Brendan
 
Brendan Burgess said:
.... Irish consumers virtually refusing to switch to cheaper lenders....
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Will we ever learn ? ... its the same old story every time, moan about the cost of financial services, then don't do anything about it when options present themselves (either from existing or new entrants to the market).

Getting back to Frank Money, I was very interested in the concept and felt that if they had launched quickly and successfully, there might be others that would follow with a similar business model. I think there could be an opportunity to follow this model and lend into the commercial property market, where lending rates are less competitive. Sure, some commerical property expertise is required, but I would have thought that was reasonably easy to sort out.
 
I have become one of those under the title "inertia". A couple of years ago, I was able to get a mortgage very (very) easily. Now, even though on higher income, I am unable to switch due to the fact that I married and my wife's financials are pulled into relevancy. Regardless of the fact financially could pay for a second mortgage comfortably, we now do not meet banks lending criteria. Now I'm starting to question is there really that much inertia, or have peoples circumstances changed, precluding them from switching. Anything from:
  • newly adopted bad financial handling (having a little bet, late paying credit card etc)
  • getting married
  • having children
  • forced wage cut
  • increased costs - higher running costs for home/car/older children/college etc
  • loss of job/newly changed job/gone contracting/self employed
So now I am at the complete mercy of my mortgage provider. They can choose to do what they want with their rate, and I have to go along for the ride
 
Hello Dauhee,

If you have maintained a perfect repayment record, then perhaps you can get a competitor bank to consider your application as an exception to the CB rules (they are permitted a small percentage of exceptions, as I understand it). Have you considered this approach ?

Dauhee said:
I have become one of those under the title "inertia". ....
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While I appreciate the various points you make, with regards to your own circumstances... I was actually referring to the population at large, we saw something similar ten years ago when there were other banks offering a range of retail products (i.e. Danske, ACC, Halifax Bank of Scotland etc.) and they were unable to attract in significant customers, despite offering very competitively priced services.

I've come to the conclusion that it's an Irish thing (whether it's about finances, politics, retail prices for imported goods, public services etc.) we like to have a good moan in the pub, but then do nothing other than look forward to complaining further about the same thing time and time again....kinda makes you think we deserve a lot of what we get :(
 
Thanks MrEarl, but its a lost cause for me currently. It has opened my eyes however, as there may not be as many "lazy" customers as thought
 
Dauhee said:
It has opened my eyes however, as there may not be as many "lazy" customers as thought
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@Dauhee I have raised this previously as well in other threads, although I did not include the 'married into trouble' as one of them. I had the childcare one included, which to me is the big one whether it be creche or college ! Also the obvious negative equity and pay cuts included.

So yes, I agree that there are a portion of customer who cannot move, as opposed to will not move. My personal view is these are the people who should be protected via the FF legislation. Those who can move should, and therefore create a level of competition around rates. This only works of course if customers have their eyes open when dealing with banks and ensure rate cuts are passed onto them

For those who cannot switch, the advise is to move to the best possible product with the bank you are with, until you get to a point where you can switch and then vote with your feet.
 
MrEarl said:
I was actually referring to the population at large, we saw something similar ten years ago when there were other banks offering a range of retail products (i.e. Danske, ACC, Halifax Bank of Scotland etc.) and they were unable to attract in significant customers, despite offering very competitively priced services.
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Absolutely agree with this statement as a generalisation. I believe there is research in the UK which states a person is more likely to divorce than change their banks - and although the divorce rate is much lower here, I would say the same applies.

I think those on AAM are the exception to the rule generally, as they are aware enough of their finances to be on the site in the first instance. I think a high level financial review on the vast majority of the population would be a scary result
 
The Financial Times is reporting this morning that The Frank Mortgage has raised €200m from several of the country’s pension funds and will begin lending once it has raised €250m. Maybe this is going to happen after all...
 
Sarenco said:
The Financial Times is reporting this morning that The Frank Mortgage has raised €200m from several of the country’s pension funds and will begin lending once it has raised €250m. Maybe this is going to happen after all...
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Thanks for the update. The FT article is here. No mention as to whether Frank have got CBI approval yet or not.

Interesting stat in the FT article about the Dutch mortgage market ... "The company hopes to follow a trail blazed in the €660bn Dutch mortgage market, where a host of nonbank lenders backed by insurers and pension funds have provided nearly a fifth of new lending in recent years, up from almost nothing."
 
gnf_ireland said:
Absolutely agree with this statement as a generalisation. I believe there is research in the UK which states a person is more likely to divorce than change their banks - and although the divorce rate is much lower here, I would say the same applies.

I think those on AAM are the exception to the rule generally, as they are aware enough of their finances to be on the site in the first instance. I think a high level financial review on the vast majority of the population would be a scary result
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All we can do, is continue to spread the good word ;)
 
gnf_ireland said:
Absolutely agree with this statement as a generalisation. I believe there is research in the UK which states a person is more likely to divorce than change their banks - and although the divorce rate is much lower here, I would say the same applies.

I think those on AAM are the exception to the rule generally, as they are aware enough of their finances to be on the site in the first instance. I think a high level financial review on the vast majority of the population would be a scary result
Click to expand...

That may possibly be because for many there's not that much point; the Irish banking landscape is not very competitive, and unless you're on a BOI SVR or something, savings from switching are going to be pretty small, and may not compensate for the effort involved. If Frank actually deliberately pitched a substantially lower rate than AIB et al, and cherry-picked customers unlikely to default, then I'm sure they'd get lots of switchers. 2.5% would be mediocre by EU standards but great by Irish standards, say; if they pick a customer profile which is likely to pay back the loan reliably, they'd still be doing better on that rate than lending elsewhere in the EU, and they'd have no trouble finding customers.
 
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