An Australian-owned lender has ramped up its presence in Ireland's mortgage market

Pepper Money is the latest firm to offer loans direct to customers in an increasingly competitive market.

By Conor McMahon Deputy editor, Fora

NON-BANK LENDER Pepper Ireland is ramping up its presence in what is becoming an increasingly competitive mortgage market.

The Australian-owned group has launched direct-to-consumer home loans under a new brand name, Pepper Money. Borrowers can apply for mortgages through its website or by phone.

Pepper Group, which launched its Irish subsidiary four years ago, has been selling three mortgage products through Irish brokers since January of this year: Pepper Essential, Pepper Essential Plus and Pepper Advantage.

In July, the lender reduced its rate across all three products to as low as 3.1%. It specialises in lending to those re-financing their mortgages , self-employed workers and people with a bad credit history.

“We understand every person’s financial circumstances are different so we are committed to taking time to look at the person and not just the paperwork,” said Barry Delaney, head of sales at marketing at Pepper Money.

“Our starting point is to consider all the reasons why customers should get mortgage approval, not why they shouldn’t,” he added.

More competition

Chief executive of Pepper Ireland Paul Doddrell claimed the group’s “more individual approach to dealing with customers has gone down well” since its initial entry into mortgage lending at the start of the year.

“Our products are intended to target a broader and more diverse range of customers so we tailor our loans based on people’s needs,” he said.

Writing in a briefing note this morning, Davy analyst Diarmaid Sheridan said Pepper’s expansion is “a further sign of the intensification of competition in the Irish mortgage market”.

It follows recent moves by Ulster Bank and KBC, which reduced their rates, Sheridan noted, while Bank of Ireland has boosted its cash-back offer to 3%.

File Pics KBC Bank Ireland has reported a loss of 864 million for the year following loan impairment costs of 1.06 billion. KBC's Dublin city centre branch
Source: Leon Farrell/Photocall Ireland

“(Pepper’s) move into consumer finance will also increase competition in this market. Consumer lending is currently the only segment of the Irish lending market experiencing growth.”

Irish homebuyers are still paying among the highest interest rates in the Europe for new loans, with the average in August sitting at 3%. The equivalent rate across the eurozone was 1.87%.

Pepper began operating in Ireland in 2012, entering the market as a servicer of residential and commercial mortgages and auto finance loans.

It took over the day-to-day management of Danske Bank’s 14,000-odd loans in 2014 after the Danish lender shuttered its Irish operations. The company currently has €16 billion of assets under management worldwide.