The Irish subsidiary of Australian listed financial
services group Pepper is set to offer home loans here from February 1st
through a small group of brokers.
This will make it the first new mortgage lender in
the Irish market since the banking crash in late 2008 and the first
non-bank group to offer home loans.
Pepper Homeloans will launch three mortgage products
in Ireland for both home owners and buy-to-let loans. They will be
targeted at people looking to switch their loans or consolidate their
debts, the self-employed or those with impaired credit histories, and
first-time buyers.
The loans will be offered through a group of about 20 mortgage brokers. “That’s likely to change over time,” Paul Dorelle,
Pepper’s chief executive in Ireland, told The Irish Times. “If things
are going well, we’re likely to work directly with consumers ourselves,
which is something that [Pepper] Australia launched last year. It
depends on how we travel.”
Pepper Essential will be available for residential
and buy-to-let customers with standard variable rates starting at 3.55
per cent for owner occupiers and 4.5 per cent for investors.
Essential Plus has been “tailored” towards the
self-employed and those with “non-standard employment types”, with rates
starting at 3.8 per cent for residential and 4.75 per cent for
investors.
Its Advantage product will be aimed at people with a
“legacy credit event” that is causing them difficulty in obtaining
finance. Standard variable rates for this begin at 4.3 per cent for
residential and 5.75 per cent for buy to let.
Customers applying for the Advantage loan must not
be in arrears or negative equity, and must demonstrate a clean credit
record for the past two years.
An arrangement fee of 0.5 per cent will also apply
along with a valuation fee of €150. Investors will be required to pay
legal fees of €1,550 for their loans.
The maximum term will be 30 years for residential
and 25 for buy-to-let and the loans will be targeted at borrowers in the
greater Dublin area, Cork, Limerick and Galway.
Mr Doddrell declined to provide any details on how
much the company plans to lend or what market share it is targeting. He
said it was “very difficult” to put a number on the potential universe
of customers for Pepper’s mortgages.
He rejected the suggestion that some of the loans
might fall into the sub-prime category. “For us you have to have a good
two-year track record of being repaired. It’s more of a near prime
product. Pepper has never operated in the sub prime market and never
will.”
Pepper will be taking on a number of large and well established banks with its mortgage offering.
According to stockbroker Goodbody, AIR and Bank of Ireland each have a 30 per cent share of the Irish mortgage market, with Ulster Bank at 15 per cent, and Permanent TSP and KB C Bank Ireland at 12 per cent each.
Mr Doddrell described its headline rates as
“competitive” and said it would look at each application on its “own
merits”, rather than using an automated credit scoring model based on
certain formulas.
Pepper entered the Irish market in 2012 as an asset
servicer. It services more than 50,000 mortgage accounts here, mostly
for third parties and has more than €14 billion in assets under
management.
It employs 400 staff in Dublin and Shannon, with another 50 new jobs set to be created this year.
Latest filed accounts for Pepper’s Irish business show that it made a profit of €6.6 million on revenue of €27 million in 2014.
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