Pepper begins lending directly to borrowers today

OK, they have a separate website http://www.peppermoney.ie (www.peppermoney.ie)

They charge all borrowers an arrangement fee of 0.5% up to a maximum of €1,800.

Here are their rates for PAYE workers:

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For self-employed or contractors, they charge more

upload_2016-11-7_9-34-29.png

And for people with credit-issues, their rates are not too bad, although not available to First Time Buyers

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It's probably the right business model, on paper, charging an arrangement fee instead of paying cash up front.

However, their ongoing rates should be lower as a result, which they are not.

Self-employed have a much higher default rate than PAYE employees, so they are correctly reflecting this in their rates.
 
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I don't see why anyone who could get a loan from EBS would borrow from Pepper?

If they are borrowing €200,000, they will have to pay €1,000 to Pepper whereas, they will get €4,000 from the EBS.

If they are a PAYE worker, they will pay EBS 3.3% instead of 3.1% or €400 a year. Well worth the extra €400 to be better off by €5,000 up-front. In fact, if the €4,000 is set against the mortgage balance, it would reduce the interest paid by €165. So the borrower is paying a net €235 a year extra to be better off by €5,000 up-front.

Brendan
 
When Tesco bank started offering mortgages in the UK in 2012, they were very uncompetitive in the market. This was unexpected by most with regard to an offering from them and the suspicion was that they didn't want to launch into the market with market-leading rates and inundate their, yet to be refined, underwriting process with the number of applications that one would expect when offering the lowest rates on the market.

Indeed, today, Tesco is offering products such as a 5-year fix at 1.89% (only 0.05% above the market topper from HSBC).

Perhaps Pepper are following the same approach here in Ireland. Only time will tell but more competition is good, regardless of whether they ever offer market-leading rates.


Edit: Adding Link:

http://www.telegraph.co.uk/finance/...inally-launches-first-range-of-mortgages.html
 
Hi ronaldo

Not sure about that. I see Pepper as an expensive lender suited only to sub-prime borrowers.

If they get that reputation, it might be hard to shake it off.

Pepper's main strength is that it is a very efficient mortgage administrator. They should be able to handle a lot of applications.

I could see Tesco being inundated. But it's unlikely a relatively unknown company would be.

Brendan
 
You may be right - I'm just not sure if there is too significant a market in the 80% LTV sub-prime mortgage market to make it worthwhile as the only offering they concentrate on.

That being said, their BTL rates seem good. The best rates I can see for BTL are:

PTSB: 5.10%
AIB: 4.85% SVR
BOI: 4.60% Variable BTL
UB: 4.5% Buy to Let Flexible Variable
Pepper: 4.40%
 
Maybe they are just dipping their toe in the water to see if anyone bites.

I don't expect any big lenders to enter the Irish market, only niche lenders like Pepper, Dilosk, and hopefully, Frank.

Brendan
 
Toledo said:
Brendan, do you know whether Pepper will do equity release type products ?
Click to expand...

Yes, they do. That is where they can get a march on the other lenders. Normal lending requirements apply, so it's not just a case of getting the equity released. They will also look to take over the entire mortgage for an equity release.

Be aware, they have a very limited area for where they will give mortgages. The great Dublin area (up to Drogheda, down to Wicklow town and across into Kildare), Cork, Limerick, Shannon and Galway. That's it.

They are pretty handy to use for non sub prime cases where the other lenders are playing silly buggers. If it's a good application, they'll go for it while the other banks are telling you the application must come in on cream coloured paper, not white.

Steven
www.bluewaterfp.ie
 
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