A new nationwide mortgage product has been launched by credit unions, offering a single standard rate aimed at first-time buyers and homeowners switching lenders.
The new ‘Credit Union Mortgage’, unveiled on Monday, introduces a variable interest rate of 3.85%, placing it among the lowest variable rates currently available in Ireland’s mortgage market.
Unlike previous offerings, where individual credit unions set their own local rates, the new product introduces a single national rate, designed to create uniformity and enhance competition with mainstream lenders.
The League of Credit Unions said the new product will provide borrowers with “certainty of repayment while maintaining the flexibility of a variable mortgage.”
To protect borrowers from rising rates, the product includes a rate cap of 4.4% for the first three years.
Initially, the mortgage will be available through around 30 credit unions nationwide, with a further 40 credit unions expected to roll out the product next year.
The launch follows a major policy shift from the Central Bank of Ireland, which in August increased the lending capacity of credit unions to allow greater participation in the mortgage and business lending markets.
Under the revised lending limits — which took effect in late September — credit unions’ total capacity for mortgage and business lending has more than tripled from €2.9 billion to €9.9 billion.
Minister of State for Financial Services, Credit Unions, and Insurance Robert Troy said the new flexibility would help make the sector more competitive and customer-focused.
“The Central Bank’s decision to raise lending limits is welcome as it supports more competition in the market,” Mr Troy said. “The introduction of innovative credit union mortgage products will be welcomed both by those looking to purchase a first home, and by those looking to switch lenders.”
He added that broader mortgage infrastructure and stronger competition would be key to ensuring affordability for first-time buyers and families trading up or down in the coming years.
The new mortgage initiative was developed by CU Mortgage Services, a body established earlier this year to design standardised lending products and streamline approval processes across the credit union network.
CU Mortgage Services said the standardised model will make it easier for borrowers to compare offers and access affordable financing through their local credit union.
Seamus Beirne, Head of CU Mortgage Services, said the development reflects the growing ambitions of credit unions to become “serious players in the mortgage market.”
“Credit unions have a long track record in responsible lending, and their members are crying out for more choice in the mortgage market,” he said.
He added that more products are expected to follow in the coming months as credit unions expand their capacity and membership base.
Financial analysts say the move could help inject much-needed competition into a market still dominated by a small number of banks, particularly following the exit of Ulster Bank and KBC.
If successful, the new credit union mortgage model could signal a broader transformation in how Irish consumers access home financing.
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