Avant Money has announced its newest mortgage product - the Flex Mortgage - a variable rate mortgage with rates starting from 3.31%.
The rates are linked to the 12-month Euribor, a key benchmark that reflects interbank lending costs across Europe.
Avant said its Flex Mortgage will be available to both new and existing customers from April through Avant Money directly and select mortgage brokers.
Designed for complete flexibility, the lender said its new mortgage offering allows customers the option to make unlimited overpayments and repay their mortgage in full at any time, without early exit fees.
It said that unlike standard variable rate mortgages, where financial institutions determine when to adjust rates, the Flex Mortgage aligns with the 12-month Euribor market rates across Europe.
The customer's interest rate is set on the day of drawdown and adjusted annually based on the 12-month Euribor market rates. This also provides certainty over their repayments for the following 12 months.
Brian Lande, Head of Mortgages for Avant Money, said the Flex Mortgage is designed to give consumers more choice in how they manage their mortgages.
"This type of mortgage is already very popular across Europe, and we are pleased to be the first lender to bring this to Ireland," Mr Lande said.
"This latest product is part of our continued commitment to deliver better, more flexible mortgage solutions that meet the evolving needs of homeowners," he added.
Martina Hennessy, Managing Director of Irish mortgage brokers Doddl.ie, said that Avant Money have actively driven change in the Irish mortgage market since they entered the Irish market five years ago.
"This new Flex Mortgage continues that trend, offering borrowers more control and insight into how their rate is determined," she said.
She noted that since 2008, Irish mortgage consumers have had just two options - fixed or variable rates, with variable rates set at the lender's discretion and often uncompetitive.
"The new Avant Money Flex Mortgage brings greater transparency to variable rates by setting a clear fixed margin to the published Euribor rates, allowing borrowers to track and monitor their rate with confidence," she added.
She also said that the timing of the launch is significant.
"The Euribor rate is currently trending low, allowing Avant to price this product competitively. Homeowners with more than 20% equity can secure a 3.31% rate, which is considerably lower than many other variable rate offerings," she noted.
"The Euribor rate is reviewed annually, providing more stability than a tracker mortgage, which adjusts within 30 days of an ECB rate change," she said.
"The margin is fixed at drawdown and remains unchanged while the borrower stays on the product. Borrowers can overpay at any time without penalty," she stated.
"This mortgage brings together the best of both worlds - the transparency of a tracker mortgage with the stability of a fixed-rate product, since repayments only change once a year," she added
Joey Sheahan, Head of Credit at online brokers MyMortgages.ie, also welcomed the news, describing it as a positive development for mortgage customers in Ireland.
"By linking it to the 12-month Euribor rate, it introduces a more dynamic option than we’ve seen in the market for some time," he said.
"This level of flexibility, particularly with unlimited overpayments and no early repayment penalties, will be appealing to borrowers looking for greater control over their mortgage", he added.
However, Mr Sheahan said it is important for borrowers to fully understand how a Euribor-linked mortgage works.
"While the prospect of lower rates can be attractive, rates can also increase, just as we have seen over the past two years with ECB interest rate movements. Anyone considering this product should be comfortable with potential fluctuations in their repayments," he added.
