Irish firm Ardent and South African bank Investec have come together to offer mortgages to borrowers with a poor credit history.
Their joint venture, to be called called Nua Homeloans, will put together, distribute and service mortgages for this sector of the homeloan market from early next year.
Ardent's subsidiary, Shared Home Investment Plan (SHIP), provides lifetime mortgages to older homeowners, allowing them to borrow against the value of their homes without having to sell or make repayments.
The so-called non-standard mortgage for borrowers with a poor credit history is a well established sector in the UK. Ardent estimates the value of the Irish market to be worth about €1 billion, with the potential to grow to €4 billion in the coming years.
Billy Kane, Ardent chairman, said the interest rates likely to be charged by Nua would be in the region of 0.7 per cent and 2 per cent higher than the standard mortgage rate, which, prior to the ECB rate decision today, was between 4.5 and 4.8 per cent, depending on the type of mortgage.
Mr Kane added that it was expected that Nua customers would only remain for about two years before moving to a conventional banking product.
"Too many customers are currently excluded from the mortgage market because, for example, of problems they might have had with previous loans which have impacted on their mortgage credit rating," he said.