The move comes despite smaller lenders increasing their rates in the past two days.
Avant Money, which is owned by Spain’s Bankinter and has a banking licence in this country, is cutting its fixed rates by up to 0.35 of a percentage point.
It also said it will double its cash back to borrowers to 2pc of the mortgage value.
The changes take effect for new mortgage drawdowns from Monday, January 19.
Brian Lande, head of mortgages at Avant Money. Picture by Jason Clarke
Today’s News in 90 Seconds, Wednesday, January 7
Avant Money has also launched a high-value mortgage for loans over €300,000 with fixed rates starting from 3.20pc for loan-to-values of less than 60pc.
Head of mortgages at Avant Money Brian Lande said the new high-value mortgage will be available for all properties and is not restricted to higher Building Energy Ratings (BER) ratings.
“Repayments on a mortgage of €500,000 with less than 60pc loan-to-value over 30 years at 3.20pc will now be €660 lower per year compared to the existing four-year fixed rate,” he said.
“Alternatively, choosing a cashback-eligible product would offer cashback of €10,000.”
The rate-cut move comes despite non-bank lenders ICS Mortgages and Spy Finance, which targets equity release products at older homeowners, raising their rates this week.
ICS Mortgages said it is raising fixed home loan rates by as much as 0.45 of percentage point.
Spry Finance, the trading name of Seniors Money, is raising its rates by 0.25 of a percentage point.
Experts said these non-bank lenders do not have access to cheap funding in the form of customer deposits to finance their mortgage lending, unlike AIB, Bank of Ireland, PTSB, Avant Money, and MoCo.
Wholesale money markets have seen rates rise lately due to the markets concluding that the next European Central Bank move will be upwards.
Mortgage adviser Michael Dowling, of Irish Mortgage Brokers, said the changes to Avant Money’s product offering were significant.
“Avant Money has introduced a new ‘high-value’ mortgage over €300,000 with rates from 3.2pc fixed for four years which are the cheapest non-green rates on the market currently.
“The average mortgage in our market exceeds €300,000 so this is welcome news for this cohort of borrowers.”
Mr Dowling said the reduction of 0.35 of a percentage point on the Avant Money five year fixed rate offering will save borrowers €60 a month on a €300,000 mortgage.
He said it was surprising that Avant Money has doubled the cashback to 2pc of the loan amount from 1pc, and this will be very welcome news for some borrowers.
“Avant Money in the first week of the year is setting out its intention to grow its market share with these changes. Let’s hope others follow suit.”
The European Central Bank (ECB) held its rates steady at its December meeting, having cut rates eight times since June 2024.
Brokers had, including Doddl.ie, had predicted more competition in the home-loans market this year.
Avant Money is part of Bankinter, one of Europe’s leading banking groups. It operates in Spain, Portugal, Ireland, and Luxembourg.
Avant Money offers a growing range of financial products in Ireland, including credit cards, personal loans, and residential mortgages.
It is expected to offer a deposit account this year.