Ireland’s only lifetime loan provider has raised €100m to fund the expansion of its franchise, a move that could more than double its size in the market.
Pry Finance, the retail brand of equity released mortgage provider Seniors Money, has entered into the long-term financing agreement with Canada Life Reinsurance to refinance its existing loan book and provide money for future loans.
The transaction is an important signal of the lender’s intention to expand in an area that is largely greenfield for lifetime loans, after controversy during the financial crisis brought the product to a virtual standstill in Ireland.
“Our agreement with Canada Life Reinsurance supports our commitment to grow Spry Finance’s business in Ireland and to develop the Irish life loan market, inspired by growth in other markets such as the UK,” said John Moriarty, Spry Finance Director.
The news follows Seniors Money’s acquisition of a €90m portfolio of equity release loans from another Irish issuer that is no longer marketing the product.
Bank of Ireland and Finance Ireland were the only other brands on the market. The Bank of Ireland last sold equity release mortgages in 2010. Finance Ireland will also no longer actively market the product.
The transaction significantly expanded Spry’s portfolio of 750 loans averaging between €50,000 and €80,000. The new financing agreement with Canada Life would fund up to 2,000 loans of that size.
Lifetime loans are a form of mortgage marketed to over-60s who have already paid off their homes. The loan is secured against a percentage of the home’s equity. .
Borrowers do not have to make any payments and the balance plus interest is settled from the proceeds of the estate after death. The loans are viewed by some as controversial, however, as estates can end up owing twice the value of the original loan, although high property prices make them financially attractive.
The product is popular in the UK where numerous suppliers compete for the business and market the product in response to longer life expectancy and poor retirement provision.
Seniors Money has operated in Ireland since 2006. Spry Finance launched in 2021.
https://www.independent.ie/business/irish/lifetime-loans-spry-finance-gets-100m-to-grow-franchise-in-ireland-after-controversy-over-product-during-recession-41998639.html Lifetime Loans: Spry Finance raised €100m to expand franchise in Ireland after controversy over product during recession