Niall Collins: 'Irish mortgage market has been badly in need of a major shake-up'
HOUSEBUYERS may be able to get their mortgage at the post office from next year when the new service is rolled out by An Post.
The move was given the go-ahead by An Post last week and interest rates are expected to be up to 1% less than those currently available. The mortgages will be made available to both new and switching mortgage holders.
An Post’s decision has been welcomed by opposition TD for Limerick Niall Collins who has said it is the “major shake-up” needed in the Irish mortgage market. And he has called on the government to back it.
“For some time now, the Irish mortgage market has been badly in need of a major shake-up,” Deputy Collins said.
“Consumers are still paying the highest rates in the Eurozone and there has been no sign of any major new competition arriving into the market. This is what makes the statement from An Post so significant.”
The average rate of interest on a new home loan in the Republic in July was 3.2% while the average across the euro zone was just under 1.8%, according to the Central Bank.
“While the main mortgage lenders in Ireland are spending money on marketing, there is little sign of real competition,” he continued. “The fact that none of the other banks have felt the need to match Ulster Bank’s new 2.3% fixed rate announced last June speaks volume for the lack of dynamic competition in the market.”
“If An Post can deliver a mortgage product at up to 1% cheaper than the existing banks, consumers will be the winner,” Deputy Collins added.
“An Post is in a positive position to enter the mortgage market as it does not have to deal with legacy issue such as the tracker mortgage debacle and the high rates of non-performing loans. With the right partner, An Post has the potential to offer an exciting mortgage product and at much cheaper rates than currently available.”
“I believe it is time also to review the restrictions on long term lending currently in place preventing Credit Unions from reaching their potential as a mortgage lender. Credit Unions also have the capacity to provide badly needed competition in the Irish mortgage market.
“This announcement by An Post is most welcome. They now need to be given every possible support by government to make it a reality,” concluded Deputy Collins.