Avant Money said it will cut the interest rates on its One Mortgage product with rates now starting from 3.95% for the full life of the mortgage.
The company said its One Mortgage product is the only mortgage in Ireland with monthly repayments that will never change.
Avant Money also said today it is increasing its shorter-term fixed rates by an average of 0.3%. Rates on three-to-five-year fixed rates will now start from 3.6%.
The ECB has raised interest rates seven times in the past ten months and it is expected that these rate hikes will continue until inflation in the euro zone is under control.
Avant noted that every 1% rise in mortgage interest rates adds about €166 to the average monthly mortgage repayments.
Brian Lande, Head of Mortgages at Avant Money, said that with interest rates predicted to rise even further, its One Mortgage offers customers the option of fixing their mortgage repayments now - and avoiding any further increases.
"We also recognise that many borrowers will face a rate shock when their current fixed rates expire. We're announcing a range of mortgage switcher incentives to help address this," he added.
He said the company's legal fees incentive helps with the cost of switching while its rate lock feature means that customers can complete the journey knowing the rate they will switch at.
Commenting on Avant Money's move, Trevor Grant, the Chairperson of the Association of Irish Mortgage Advisors (AIMA), said the decision to cut the rates on its ten-year fixed and lifetime mortgages is the first interest rate cut seen in the Irish mortgage market in a long time but probably is not a sign of things to come.
Mr Grant said that fixing for the life of the mortgage is not for everyone but at Avant's new rates, it is certainly worth consideration.
He noted that fixing long-term is the norm in Europe as it provides great certainty.
He also said that a certain amount of flexibility is allowed with Avant’s lifetime mortgages including an overpayment option, a maximum early redemption fee of 2% in the event that you pay off your mortgage early, and the option to port your mortgage to a new home if you’re moving.
"Given that interest rates have increased in recent months, there is still merit in reviewing and fixing your mortgage, particularly in light of today’s announcement from Avant," Mr Grant said.
"Whilst ECB rates may fall over time, we believe they are likely to fall to no lower than 2.5% and certainly not to zero. Furthermore, any ECB rate cuts are likely to happen slowly and over time," he added.
