variable rate policy

Variable Rate Policy Statement

Please note: This statement details the factors we consider when setting our variable interest rates for mortgage loans.

What do we consider when setting our variable interest rates?

A variable interest rate is an interest rate that can rise or fall over time. There are a number of standard factors which we consider when we set or change our variable interest rates, and these currently include:

• The cost of funds which refers to the cost we incur when borrowing to fund our mortgage business:
• Capital, the return on our mortgage products enable us to maintain a minimum level of reserves to meet regulatory requirements.
• Mortgage operational costs, which refer to the costs related to the general day to day running of our business including staff, administration and infrastructure costs.
• Market competition, which relates to external factors such as activity in the market as a result of new entrants, competitor movements and changing customer preferences.
• Taxation, which relates to any change in taxation which may affect the profits of the company.
• Expected returns, which relates to the expected income generated to ensure we can operate a sustainable residential mortgage business.
• Loan default risk which reflects the risk that some of our customers will be unable to make the required payments on their mortgage borrowings.

Because variable rates can rise and fall, your mortgage repayments can go up or down during the term of your loan. A variable interest rate allows you to increase your repayments, pay lump sums off the capital or pay off the mortgage entirely without penalty.

How do we make decisions when setting variable interest rates?

Interest rates are monitored on a regular basis and are set by Avant Money’s Mortgage Pricing Forum.

Why do we have different variable interest rates?

We can apply different variable interest rates to customers depending on, for example when you borrow your mortgage or the risk associated with a mortgage.

Could you get a different type of interest rate or a lower interest rate?

A mortgage is a substantial financial commitment; therefore, you should ensure that you are not paying more for it than you need to. It is important to regularly review your mortgage and any interest rate options that may be available to you. For example, with our agreement, you may be able to choose a fixed interest rate for all or a portion of your mortgage that will be fixed for an agreed period of time.

Further information about our mortgage loans and interest rate options can be found on our website www.avantmoney.ie/mortgages/rates. Please contact us for further details if you wish to explore any of these options.