Revolut is set to offer mortgages to the Irish market later this year.

The announcement comes from the UK based digital bank as it seeks to challenge the monopoly on the three main banks in Ireland.

CEO of Fairstone Ireland Paul Merriman told The Pat Kenny Show he’s not sure how successful this endeavour will be.

“I think Revolut probably underestimated how complex getting into the Irish marketplace was going to be, especially when it comes to the Central Bank and regulations,” he said.

“They're hoping to get in by the end of Q2 or maybe Q4 this year for a soft rollout before maybe taking it serious in 2026, by the sound of things.

“I think you have bit of a challenge here though, to be honest with you.”

Signing a home mortgage agreement, a woman signs a mortgage agreement, a close-up. Image: Evgeny Dmitriev / Alamy. 4 July 2021

Mr Merriman said that while it is great from a consumer perspective that there will be more competition in the mortgage market, most of Revolut’s three billion customers don’t use the service as their main bank.

“I think everyone that I know that has a Revolut account doesn't have all their bank account Revolut only; they don't really put their salary into Revolut or direct debits into Revolut,” he said.

“So, I'm not sure whether they're going to get the market traction as quickly as they thought.

"A mortgage is such a complex product that people tend to have a lot of touch points with their advisor. [...]

“I think Revolut are going to have to go into the broker market to be honest with you."

Cheaper rate

According to Mr Merriman, Revolut will likely come out with a cheaper rate than Irish banks currently offer.

However, he said the underwriting behind these loans could cause some problems.

“Every lender will have his different kind of criteria and different underwriting rules,” he said.

“So, some lenders will look at people that want to maybe have overtime differently than others that have a contract work differently than others that are self-employed differently than others as well.

"Coming into the marketplace and having the cheapest rate is great, but also you have to make sure that that underwriting stacks up in the background to make sure that you can actually look at it.”

Mr Merriman said Revolut will likely start off by offering “switcher market packs”, where customers are incentivised to switch their mortgage from their previous bank to Revolut.

Main image: Revolut card (L) and house keys (R).