Núa Money has announced a significant reduction in mortgage rates, a move that experts believe will intensify competition in Ireland’s home loan market. The non-bank lender, which entered the Irish mortgage sector last year, is cutting rates by up to 0.75 percentage points, making its offerings more attractive to borrowers.
The company, backed by the Allen beef dynasty from Wexford, began providing mortgages in July 2023 after securing a licence from the Central Bank of Ireland. Unlike traditional banks, Núa Money does not rely on customer deposits for funding, which typically results in slightly higher rates. However, this latest cut aims to narrow the gap between its rates and those of larger financial institutions.
Lower Mortgage Costs for Borrowers
Núa Money’s rate reduction applies to first-time buyers, home movers, and mortgage switchers. The five-year fixed rate for those borrowing 60% or less of their home’s value has dropped from 4.5% to 3.75%, while borrowers with a higher loan-to-value (LTV) ratio will see their rates fall from 4.6% to 4.05%.
For those opting for a three-year fixed rate, the lowest available rate has been cut from 4.6% to 3.85%. In addition to standard mortgage products, Núa Money has also reduced rates on its equity release offerings.
According to mortgage broker Michael Dowling of Dowling Financial, these reductions align Núa’s rates with other competitive options on the market. However, he pointed out that the loan-to-value limit of 70% means the majority of first-time buyers—who account for 60% of new mortgages—may not benefit from these changes.
How Much Can Borrowers Save?
The impact of Núa Money’s new rates could be substantial for borrowers. A couple securing a €300,000 mortgage over 35 years on the revised rates could save around €135 per month, amounting to over €1,600 annually.
Dowling also praised Núa Money’s fast and efficient mortgage process, describing it as being “light years ahead” of mainstream banks in terms of service.
Competitive Pressure in the Irish Mortgage Market
Núa Money’s move comes just weeks after MoCo, another new entrant backed by Austrian bank Bawag, cut its fixed mortgage rates to as low as 3.6%. MoCo also offers €1,500 cashback to buyers and switchers, increasing competition with established lenders such as AIB, Bank of Ireland, and PTSB.
Martina Hennessy, managing director of Doddl.ie, noted that these new lenders are transforming the mortgage landscape by offering faster approvals and more competitive pricing. Digital applications now enable mortgage approvals in hours rather than weeks, putting pressure on traditional banks to improve their services.
Looking ahead, credit unions are expected to become bigger players in the mortgage sector, as new regulations may allow them to triple their mortgage lending to over €2bn. Additionally, digital bank Revolut has announced plans to enter the Irish mortgage market later this year, further shaking up the industry.
With new lenders driving innovation and reducing costs, Irish mortgage consumers could soon have more choice and better deals than ever before.
