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Finance Ireland offers fixed term rate on residential mortgages for 20 years

DUBLIN: Finance Ireland, a non-banking institution, offers fixed term rate on residential mortgages for 20 years. Experts say the scheme, which offers the same rate for a period of twice the maximum length of any mortgage currently available in the Irish market, will boost the Irish housing market.

Experts also point out that under this scheme, some borrowers will be able to keep the same rate for the entire term of their loan.

Finance Ireland has announced that customers will be able to transfer their mortgage to a new property during the term of the fixed rate without incurring any penalty. The company also said that the fixed rate will be reduced as the loan is repaid against the property value.

The two-decade fixed home loan rates range from 2.6% for a loan to value (LTV) ratio of less than or equal to 60%. An LTV that is less than or equal to 90% has a rate of up to 2.99%.

The company is also offering a range of 10 and 15 year mortgage products. In addition to residential mortgages, the company also offers commercial mortgages, auto finance, SME, agri finance and leasing.

“I’ve been involved with the Irish mortgage market for over 30 years and I believe that this is one of the most significant innovations made here in that time,” Finance Ireland’s chief executive Billy Kane said.

The mortgage scheme has been developed in association with funding partners M&G Investment. Finance Ireland, which was started by Billy Kane in 2018, is 30% owned by the Ireland Strategic Investment Fund. The company employs 160 people.

Finance Ireland’s move is a “booster dose”

Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said this is “a very welcome announcement for new and existing mortgage holders”.

“Whilst mortgage interest rates are at an all-time low in the context of the Irish marketplace and are not likely to increase in the short term, they will eventually rise over time – something which mortgage holders will have to consider,” Mr. Grant said.

Finance Ireland’s decision will shake things up in the Irish mortgage market, said Joey Sheahan, Head of Credit at MyMortgages.ie.

Brokers Ireland said the move by Finance Ireland would turn out to be a “booster shot” as KBC and Ulster Bank are exiting the market.

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