There could be a new player in the mortgage market with the news that British banking group, Investec are planning to offer mortgages to Irish consumers
The bank already offers various investment and savings products and it’s now looking to reinvigorate the country’s stagnant mortgage market. Should it go ahead with plans to start lending here, it would be the first new lender to come into the Irish market since the property market spectacularly crashed in 2008. And it would come at a great time for consumers, especially first time buyers, who face the prospect of repaying loans with high variable interest rates.
As the current crop of lenders are raising interest rates and struggling with tracker mortgages which are losing them money, Investec are most likely to do the opposite which could spark an ‘variable interest rate war’ among lenders. The bank will primarily offer mortgages to the ever-burgeoning property market in Dublin and plans to adopt a low-cost approach to doing business here by operating through a network of mortgage brokerages.
Their intent to make an impact on the market is matched by the funds it could allocate for mortgage business. The bank could put aside up to €350 million purely for mortgage lending which, if fully used, would give Investec a 10 per cent share of the new mortgage market.