Mortgage margins under pressure
National Irish Bank’s launch of a new mortgage product during the week is probably the best news for consumers of financial services since Bank of Scotland took the mortgage market by storm back in the 1990s.
The disclosure that NIB is effectively halving its profit margin on many mortgages should, in theory at least, rock the house loans market to its foundations. But much will depend on whether NIB can persuade customers to overcome their legendary inertia when it comes to switching banks.
If NIB succeeds in communicating its message effectively and consumers begin making the switch, the main mortgage lenders will be forced to react by cutting mortgage prices.
That...
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