Non-bank lenders ICS Mortgages and Finance Ireland reboot loans offering

ICS Mortgages and Finance Ireland have moved separately to refresh their home loan offerings, helped by easing international borrowing conditions, after a period where they wrote very little business as central bank rates soared.

ICS said it is increasing the amounts it will offer first time buyers to four times borrowers’ salaries, to fall in line with the current Central Bank cap. The company had cut its loan-to-income limit to 2.5 times, and increased interest rates, in August 2022 as its own funding costs jumped.

As nonbank lenders source their funding in the wholesale and bond markets, they were particularly affected as market rates spiralled in recent years in anticipation of European Central Bank moves. The ECB hiked its main lending rate from zero to 4.5 per cent in the 15 months to last September.

Banks, meanwhile, have been able to fund their loans from cheap deposits, which allowed them to avoid passing on the full effect of ECB rate hikes to mortgage borrowers.

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ICS, owned by a company called Dilosk, said its existing customers can now avail of equity release of up to 90 per cent of the value of a home to finance home improvements, education fees, medical expenses, or refinance property-related loans. It has also improved its offering to public sector employees, allowing for basic salary to be calculated as three levels up the salary scale. It previously allowed two levels.

Ray McMahon, ICS’s chief commercial officer, said the lender is “also planning for new innovative mortgages over the coming months accompanied by regular rate reviews”.

The lender’s best current owner-occupier rate, at 5.5 per cent, is much higher than headline rates of about 4 per cent on offer in the market.

[ ICS Mortgages to turn owner-occupier loans tap back on after bond sale ]

The refresh of ICS’s products comes after Dilosk secured “very strong demand” for €400 million of bonds sold in the market last Thursday, amid easing financing conditions across global markets in anticipation that central banks will cut rates at pace this year.

Meanwhile, Finance Ireland said it is cutting its three- to five-year fixed rates by 0.45 percentage points, on the back of lower market funding rates in recent weeks. It marks the first time the company has cut home loan rates since the ECB started to increase official rates in 2022.

Still, the company’s revised three- to five-year fixed rates and new seven-year rates are higher than a number of similar products elsewhere. Finance Ireland’s lowest fixed rate, at 5.35 per cent over seven years for cases with a loan-to-value ratio of 60 per cent of less, is 0.4 percentage points above the cheapest such product in the market.

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