An Post to enter mortgage market with low interest rates

An Post is to enter the Irish mortgage market next year with interest rates which are substantially lower than those currently available.

The move was given the green light by the An Post board at a meeting last week and will see rates of 1 per cent less than what is on offer, and made available to both new and switching mortgage holders.

A rate cut of 1 per cent on a €300,000 mortgage could save a borrower as much as €60,000 over the lifetime of a 30-year loan. The new offer is also likely to be welcomed by cash-strapped borrowers.

The move will significantly shake up the Irish mortgage market.

Four-year scholarship for research into motor neurone disease

---

Police investigating armed robbery in Co Tyrone

---

Five arrested after €1.7m Kinahan cash seizures

---

Housing crisis: Dublin’s O’Connell Bridge scene of mass protest

---

While An Post does not have a banking licence, it will start offering the mortgages as part of a joint venture with an as yet unnamed partner. More details of its proposals will be made available before the end of the year.

Irish lenders have been criticised for charging mortgage interest rates which are wildly out of line with euro zone averages as they have sought to repair loan books badly hit by the financial crisis.

According to figures from the Central Bank, the average rate of interest on a new home loan in the Republic in July is 3.2 per cent, while the average across the euro zone put at just under 1.8 per cent.

A spokeswoman for An Post confirmed that a mortgage package would be available to new borrowers and to switchers next year. She added that the move into the mortgage space was part of a wider retail strategy.

Credit cards

The plan is “based on three pillars”, she said, including widening its financial services offerings. Last year it rolled out a current account with debit card facilities and it also plans to introduce additional services including issuing credit cards and overdraft facilities.

The company will also seek to provide more Government services including the issuing of driving licences and ID verification services.

The third pillar it will seek to exploit is eCommerce capability through the introduction of click and collect facilities – in commuter hotspots, for example – and easier return options.

Last month, An Post announced that 159 post offices across the State will close in the months ahead as part of a restructuring plan. Minister for Communications Denis Naughten said the closures were made on a voluntary basis and represented a "necessary first step in reinvigorating our national post office network and making it a viable, sustainable and modern network for the future".