Non-bank lender Finance Ireland has announced that it is temporarily suspending the offer of fixed rate mortgage products of periods of 10 years or more to new applicants.
The company blamed volatility on interest rates internationally.
However, it said it plans to reopen applications for such products “in due course when more normal markets return”.
The company added that it will continue to offer variable mortgages and fixed rate mortgages for periods shorter than 10 years.
“Applicants for relevant fixed rate products which have received an offer will be processed as normal but new applications will not be accepted for the time-being,” it said.
In May of last year the lender began offering 20-year fixed-term rates on residential mortgages.
At the time it was the twice the maximum length of any mortgage currently available in the market.
It also announced it was offering a range of 10 and 15 year mortgage products.
At the start of October, Finance Ireland said it was raising its variable and fixed rates by between 1.5% and 2%.
It also raised rates on certain mortgage products in June.
Non-bank lenders have faced increased borrowing rates on wholesale money and bond markets, from where they access their funding.
Responding to today’s news, Brokers Ireland said the development was “worrying.”
“This is a very worrying signal. Such good value products that give security over the longer term and enable mortgage holders to plan their financial outlay, while a feature of international markets for a very long time, have only been introduced into Ireland in recent years,” said Rachel McGovern, Director of Financial Services at the organisation which represents 1,225 Broker firms.
“It’s really disappointing to see them being pulled back now. The real worry is that other lenders could follow suit,” she added.
McGovern said there are 30-year term mortgages still available in the United States, despite the fact that rates have increased.
“The non-pillar banks do have a different funding model to the pillar banks but there is a strong rationale for long-term fixed interest rates remaining to be a feature of the market. For lenders who can secure long-term financing they do offer stability to the lender as well as the consumer.
“One would hope that the difficult environment at the moment with high levels of inflation would not lead to a diminution in competition in lending. This is where the loss of KBC and Ulster Bank represents a concern,” she said.