I am trying to figure out for what sorts of customers, this facility suits.
1) It only applies to people who fix for 10 years or more
2) It is most appropriate the higher your LTV is at present.
Let's look at someone who wants to fix for 10 years
Clearly, if your LTV is less than 80%, there is little point in going for Finance Ireland.
You can fix for 10 years with Avant at 2.35% now anyway.
If you go with Finance Ireland, you will start at 2.7% and then if you bring down your LTV, it will still be higher than Avant's rate.
The exception to this would be if Finance Ireland reduces their rates generally.
For example, let's say that Finance Ireland reduces their 60% LTV rate to 1.5%, then you would be better off with Finance Ireland.
It would have to be a very sizable reduction for Finance Ireland to work out better.
Let's say you want to fix for 20 years
The downside of Avant is that this is a One Mortgage product, so the mortgage term must also be 20 years. You can't have a 30 year term, and fix for the first 20 years.
If you start with Finance Ireland at 90%, you will pay 2.99%.
You will have to get it below 70% to match Avant. In other words, you could have started with Avant at 2.75% for 90% LTV.
When you get it below 60% LTV, you will be better off with Finance Ireland.
Let's say you buy a €500k house with an 85% mortgage €425k. In the initial years, Finance Ireland will be €1,000 a year more expensive.
If, after 5 years, you get the mortgage down to €300k (60%) , Finance Ireland will be €450 cheaper.
However, if your mortgage drops to €400k after 5 years, and your house increases in value to €670k, then you will save €600 a year.
Brendan