Bank of Scotland appears to be making a remarkable success of its excursion into home mortgages here.
According to the Scottish bank, it has made provisional approvals of over £1 billion since it entered the market late last August. This means thousands of people have been tempted by one of the lowest variable rates on the market, with a price promise that it will never be 1.5 percentage points above the European Central Bank's base rate.
The bank does not reveal how much of this money has translated into actual loans, but then neither do lenders here. If they have the same sort of retention rate as the Irish lenders, it could mean loans of as much as £500 million or 10 to 12 per cent of the market.
These figures also put Bank of Scotland about fifth in the marketplace, competing with perhaps First Active. The big three lenders - Irish Permanent, AIB and Bank of Ireland - probably do not have too much to worry about yet. But for a lender with no track record, no branch business and only one product, the results do seem remarkable.
Irish lenders have tended to dismiss the Scottish arrivals. First they said they would be so small they would not have to compete but within weeks all had substantially dropped their rates. Then they questioned the numbers of people who would be interested. Now they are questioning the figures.
Of course, it is always very difficult to get to the truth of any mortgage business here. All the lenders will only say where they think they are. But the total market is likely to be around £6 billion this year and the top three lenders probably all lend about £1 billion each. EBS comes next with a slightly smaller book.
There have been some suggestions that Bank of Scotland was counting people who merely rang to make an inquiry, but the bank insists it is only people to whom it makes a provisional approval and sent out a full application form who are counted.
The other charge commonly laid at Bank of Scotland's door is that it is cherry picking and that is certainly true. The Scots are delighted with the so-called quality of their loan book and with good reason.
If you are a first-time buyer, you might as well forget it. The Scots will insist that they do not lend more than 80 per cent of the value of the home. And the average loan is only 47 per cent. Those who are looking for loans for second homes also need not apply - the offer is only open for principal private residences.
Even the average size of the Bank of Scotland loan makes it clear that most of these are not for first-time buyers: at £72,000 - around the same as the national average - it would not buy many properties in the current market.
MOST of the loans are for remortgages, where the offer of £500 towards legal fees is proving very tempting and two-thirds of its loans are people switching away from an existing Irish lender. The majority of these also add a little extra to their loan for home improvements or extensions. Many have found that it makes more sense to build on to their current home rather than pay stamp duty and go to the hassle of moving home.
This is quite different to Bank of Scotland's position in the UK. There the average loan is more like 80 per cent and loans of 100 per cent and even 120 per cent of value are on offer.
But certainly over the past nine months and for the foreseeable future, the more successful the Scots are, the lower mortgage rates are likely to be for everyone.
