Non-bank lender Avant Money has cut its three-year fixed mortgage interest rate to just over 2 per cent, making it the lowest on offer in the Irish market.
Both Avant and Finance Ireland are cutting their mortgage rates, moves that coincide with the exit of both KBC and Ulster Bank from the market.
Finance Ireland said it would cuts its 10-, 15- and 20-year fixed rates by up to 15 basis points, and also introduce a 25-year mortgage.
Avant Money, meanwhile, has cut rates on its fixed mortgages covering three, four, five, seven and 10 years for customers with a greater than 70 per cent loan to value.
Both lenders have also introduced incentives for mortgage switchers, covering up to €1,500.
Industry groups welcomed the developments.
"The decision by both Finance Ireland and Avant Money to make new mortgage product announcements is excellent news for mortgage customers, and further increases competition in the Irish mortgage market," said Trevor Grant, chairperson of Association of Irish Mortgage Advisors.
“Non-bank lenders have both reduced their interest rates and introduced other new product innovations. This is on the back of significant product advancement earlier in the year which saw them both introduce long-term fixed rates with overpayment options and the ability to move the mortgage to another property in the future.”
“Many Ulster Bank and KBC mortgage customers are nervous regarding what the future holds for them as their lender exits the market and are therefore open to switching,” Mr Grant said.
Rachel McGovern, director of Financial Services at Brokers Ireland, said Finance Ireland’s move was a “very positive move in a market where concern is growing that interest rates could rise in the next year or two”.
The ECB has kept interest rates at a historic low, but that could change in the coming months.
“No one knows at this point when the ECB may increase its interest rate but when it happens it often surprises,” Ms McGovern said. “Therefore, we would advise people to think about that and start planning for it.”