Aug 5th 2021

Mortgage lender ICS makes large rate cuts as big banks ‘stalling’

Charlie Weston

Irish Independent

Mortgage lender ICS’s big rates cuts will mean it is offering some of the cheapest home loans in the Irish market.

It became the latest non-bank lender to reduce its mortgage rates.

However, financial experts have questioned why the big banks – AIB and Bank of Ireland – have failed to do the same to match the competition from these smaller lenders.

The two pillar banks reported this week they have returned to making multi-million-euro profits.

ICS will reduce its rates by up to 0.5pc this month to bring it into line with those offered by Avant Money.

ICS claims it will be offering the lowest rates in the market.

The ICS brand was sold in 2013 by Bank of Ireland to Dublin-headquartered Dilosk.

It has more than €1bn of assets under management and is a leading provider of owner-occupier and buy-to-let residential mortgages.

It is reducing its variable and fixed rates for first-time buyers, switchers and existing customers who opt to change rates from next Monday.

The lender says the new rates mean a typical first-time buyer taking out a 30-year mortgage of €250,000 could save more than €18,000 over the lifetime of the loan when compared with the rates offered by some of the larger banks. 

Its three-year fixed-rate, for those with a loan to value (LTV) of 60pc or less, comes down by 0.5pc to 1.95pc. This matches Avant Money’s mortgage rate.

ICS is reducing its variable rate for those with a 60pc LTV by 0.25pc to 2.45pc.

For those taking out a 90pc loan, relative to the value of the property, the three-year rate comes down by 0.25pc to 2.35pc.

ICS chief commercial officer Ray McMahon said the company has been a trusted lender for generations of Irish homeowners and was continuing this legacy with the rate cuts.

“These reductions will see ICS Mortgages offering the lowest new residential rates on the market, whether you are seeking a fixed or variable mortgage, are a first-time buyer, a mover or looking to switch in search of better value,” he said.

Mr McMahon said ICS had recently introduced a series of innovations to the Irish market, including specialist mortgages for public sector workers as well the lowest buy-to-let mortgage rates on offer.

Karl Deeter, of brokerage, said the reductions show the power of specialist mortgage lenders working through brokers delivering the best prices in the market.

“The reductions mean ICS Mortgages are neck and neck with Avant Money on fixed rates and just below them on variable rates,” he said.

AIB and Bank of Ireland have not responded to the reductions from Avant Money, Finance Ireland and ICS Mortgage because they have a dominant market position.

However, Mr Deeter said that in time they will have to respond with rate cuts.

Across all lenders, new mortgage rates here are among the highest in the euro area. 

Bankers blame regulatory requirements on how much capital they must set aside when issuing mortgages and difficulties in repossessing properties when mortgage holders default.

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