A new 'niche' lender for property investors is tipped to compete with the banks
Dilosk has up to €200 million in finance for property buyers.
THE LAUNCH OF a new buy-to-let mortgage product should drive competition among lenders in the sector.
Dublin-based Dilosk announced today that it will provide buy-to-let mortgage finance after securing initial backing of €200 million.
The new product, provided under the ICS Mortgages brand, will put the company in competition with the larger, traditional Irish lenders, such as AIB, Bank of Ireland and Permanent TSB.
Dilosk’s rates will start from 4.49% and will be available for loans worth up to 70% of the value of a property. The minimum loan size is €40,000 while the maximum loan size €1.25 million. It will also offer a 10-year, interest-only option.
In a briefing note issued this morning, Davy analyst Emer Lang said that the new product is likely to create more competition in the lending market.
Competition
“Dilosk cites a lack of access to mortgage finance for buy-to-let investors (BTL) as one element of Ireland’s ‘complex housing situation’,” Lang said.
“With volumes anticipated to pick up in the next few years, the advent of niche lenders like Dilosk will ensure that price competition continues to be a feature of the market.”
Banking and Payments Federation Ireland data, cited by Davy, showed buy-to-let lending accounted for only €59 million – or just above 3% – of all mortgage approvals in the three months to November 2016.
Dilosk's Fergal McGrath (left) and Oran McGrath
Lang added: “We expect the market to remain competitive into 2017 as banks position themselves for the anticipated pick-up in volumes.”
The offering is the first new product to be launched by Dilosk since it acquired ICS Mortgages and its €223 million loan book from Bank of Ireland in 2014.
Until now, the firm has only been offering lending to its existing customer base in ICS Mortgages through various top-up mortgages.
Trial period
Dilosk said that during a trial test period with a number of mortgage brokers, there was “significant interest and take up” of the lending product.
The company’s chief executive, Fergal McGrath, said that the new product will appeal to “established property investors with existing properties, those looking to refinance and expand their portfolios, (and) those wishing to buy their first buy-to-let property”.
He added: “We are hugely encouraged by the response to date in terms of volume of applications.”
