Best Buy The Avant Tracker mortgage is a clear Best Buy and people should consider switching to it

[Brendan Burgess]

Avant launched a tracker in March which they call their "Flex Mortgage". Not sure why they don't call it a tracker.

It tracks the 1 year Euribor rate - which is very similar to the ECB rate which tracked by other mortgages.
The margin is fixed for the life of the mortgage - 0.9% for LTV <80% and 1.1% for LTV >80%

It has the huge advantage of a variable rate mortgage in that you can pay lump sums off it or clear it in full at any time, without penalty.

It has the huge advantage of a tracker in that the margin is fixed for the life of the loan. The bank can't set the rate at its own discretion. This is a particular problem in Ireland where banks have exploited people's reluctance or inability to move by having very high variable rates.

 

[Brendan Burgess]

The mechanics of setting the Benchmark Euribor rate are a bit unusual.

They reset the rate every month on the 10th of every month.

On drawdown, you get the Benchmark rate and you keep that rate for 12 months. So if euribor goes down, you don't pay less . And if Euribor goes up, you don't pay extra.

Every year, your rate is reset.

 

[Brendan Burgess]

So how does the rate as of 2nd May 2025 compare with other lenders?

Comparison of variable rates

Irish banks have had the highest rates in the eurozone for most of the last decade.

And the banks kept their variable rates artificially high because so many customers do nothing when their fixed rate ends and just default to the outrageously high variable rate. AIB was an exception to this. Their variable rates compared to their fixed rates. Still much higher than in the rest of the eurozone but not as exploitative as BoI or ptsb.

But with an Avant tracker you avoid this. You don't have to keep an eye on the rate you are being charged in case you default to a high rate through inaction. The rate will move in line with changes in the 12 month Euribor rate.

 

[Brendan Burgess]

So can a case be made for a fixed rate with Avant or a fixed rate with another lender?

I have picked some of the best fixed rates in the following table.

Maybe you are prepared to pay a premium for a 10 year fixed rate.
Well Avant is the cheapest lender at this term as well. Avant gives 1% cash back compared to BoI's 3%, but you will be paying 0.45% more each year for the ten years.

If you want to fix for 25 years and forget about it, then Avant is the only lender offering this length. 3.4% is good value. You get 1% cash back. And you can overpay by 10% each year and the maximum penalty for a partial early repayment is 2%.

The AIB 5 year green rate is the same as the Avant tracker rate and rates are expected to fall over the coming 5 years, so it looks as if Avant clearly trumps this as well.

I am struggling to find a set of circumstances in which you would choose another lender?

 

[Brendan Burgess]

This is all based on the assumption that you can get a loan with Avant.

They have the strictest lending criteria and, I don't think that they offer exceptions to the Central Bank rules.

 

[Setforlife]

Thanks Brendan, we are rolling off 1 year fixed rate with BOI of 3.85 in September, our BER is B on a refurbished house. Our best current option would seem to be AIB 3 year fixed at 3.1% with Cashback to cover switching, but we hope to get at least that from BOI by September and for AIB to have to move further by then also, to 2.85 or so. As you say the avant tracker prevents inertia but we keep a very close eye and in fairness to BOI they prompt you to pick a new rate with numerous letters in advance of rolling off a fixed rate.

If there is no movement from AIB or BOI then avant will be by far the best assuming a couple of cuts by then, however Avant offering such a solid option appears to force the hand of the others to track closer to rates at least with green offering.

 

[Fortune]

I am struggling to find a set of circumstances in which you would choose another lender?

If one had a bank account with them from the age of six?

Only reason I can think of is sticking with a current lender to avoid the hassle of remortgaging, getting valuations and solicitors, etc.

 

[Brendan Burgess]

I am looking for good reasons. I don't think inertia is a good reason.

 

[Fortune]

I am looking for good reasons

My solicitor warned me that Avant would be more likely to seek repossessions in the case of non-payment than the bailout brigade.

The only other reason I can think of is a worry that they will eventually leave the market and could leave their customers with a vulture fund.

 

[Brendan Burgess]

My solicitor warned me that Avant would be more likely to seek repossessions in the case of non-payment than the bailout brigade.

I think that most people intend to pay their mortgages and so would happily pay a lower rate in exchange for that.

In any event, unless there is a serious change in the attitude of the organs of state, it will continue to be virtually impossible for a lender to repossess.

The only other reason I can think of is a worry that they will eventually leave the market and could leave their customers with a vulture fund.

Wouldn't be an issue if you have a tracker.

 

[skrooge]

The only other reason I can think of is a worry that they will eventually leave the market and could leave their customers with a vulture fund.

I'd like to know how ironclad the contract is around the fixed margin over the reference rate.

If its in revocable then in a situation where Avant left, the worst case for the borrower would be a change of logo on their mortgage statement.

I am looking for good reasons. I don't think inertia is a good reason.

I tend to agree and it's no suprise. Over the years they've been very competitive with their rates.

Though one caveat with the Flexi mortgage might be that this rate could be very volatile. While it looks good now - because interbank rates are falling - had the same product existed in September 2023 it would have meant a mortgage rate of about 5%.

FM.M.U2.EUR.RT.MM.EURIBOR1YD_.HSTA | ECB Data Portal

data.ecb.europa.eu

It's the usual point, if you can aggressively overpay and repayments are small relative to disposable income this is a good option. If things are tight the security of a fixed might be better. But like you say that's still Avant anyway.

Like bosi and tracker mortgages is it only a matter of time before the others have to offer a similar product?

 

[Brendan Burgess]

While it looks good now - because interbank rates are falling -

Is it not the other way around?

If you draw down today, your rate is fixed for 12 months even if the one year Euribor falls over the next 12 months.

But while interbank rates are rising, you are locked into the lower rate for 12 months.

If rates rise, you can switch from this tracker to a fixed rate. However, I don't think that would be a good idea.

 

[skrooge]

Is it not the other way around?

It's and insider/outsider point

If you have a mortgage you have some certainty - if only for a year.

If you're switching you might be sweating a bit if the 10th is rolling around and your mortgage hasn't been processed.

Even worse is you've just gone sale agreed and drawdown date is a vague notion off in the distance.

To be fair it's the same for any mortgage application it's just the case other products/lenders don't tend to reprice as frequency (or rather are not as transparent).

 

[MrEarl]

@Fortune

I'm a long time Tracker Mortgage holder, ex Danske customer, now dealing with Pepper.

I've never been in arrears, thankfully.

The price promise, stated clearly in your loan contract, can't be disputed. It doesn't matter who the loan is sold to, in years to come. Both parties are contractually bound, and the Tracker rate, with defined margin, is part of that contractual arrangement.

However, the potential risk, is that your loan is sold, in the future, to a party that doesn't want to lend new money. That's what has happened to me, so I can't ever get a top up mortgage, unless I refinance with another lender, and lose my Tracker rate.

As an aside, I think Avant are less likely to run into a problem with this Tracker product, than the Banks of the past, because they are using Euribor, not the ECB rate, as their base rate. Euribor is a market rate, set by demand and supply (for/of money) that's made available between the banks. It's not like the ECB rate, set by a central lender. So, if liquidity dries up between the Banks, the Euribor rate will increase, regardless of the ECB rate. That helps protect Avant from incurring the problems of the past, when lenders couldn't pass on the increased cost of funds to their customers.

Borrowers, also get some comfort here, though, as it's a 12 month Euribor rate that's being used, so there's no surprises, with regards to instant rate increases, the changes will occur annually.