Permanent TSB's new chequebook based mortgage account, OnePlan, takes a product already available on the market - equity release - one step further.
OnePlan is nothing new, Mr Eddie Hobbs, finance spokesman for the Consumers' Association of Ireland, argues. "To describe it as a breakthrough or innovative would be using terms that are a bit strong," he says.
Chequebook mortgages are widely available in Britain, the United States and Australia, where the product has moved on to a more sophisticated and flexible range of current account and all-in-one mortgages.
One template cited by Permanent TSB for OnePlan is the similarly-named Open Plan, introduced to the British market by the Woolwich Group in 1998. Within months, more than 290,000 customers in Britain had an Open Plan account. It is now run by Barclays Bank.
"Open Plan has moved into a current account mortgage now, but it was originally a very simple product," says Mr Niall O'Grady, marketing manager for Permanent TSB. "Some of the best ideas are the simple ideas."
OnePlan has been met both adverse reaction and positive comments, notes Mr Michael Dowling, president of the Irish Mortgage Advisors Federation (IMAF).
"To be fair to Permanent TSB, it is the first institution to introduce the product into the Irish market and they're to be complimented for that. But at the end of the day there's nothing revolutionary about it. Chequebook mortgages are freely available in the UK and hopefully other lenders here will follow suit," he says.
Mr Dowling welcomes any service that will short circuit the process of getting additional finance from a bank of which you are already a customer. "The one thing that staggers British lenders when we speak to them is the amount of paperwork needed for existing customers to borrow again," he says.
Flexible mortgage products are one way of rewarding existing customers, Mr Dowling believes, and Permanent TSB's move is likely to stimulate further competition and product offerings.
"Bank of Scotland brought products that weren't freely available like the interest-only mortgage and releasing equity to the market. Three years down the line, Permanent TSB has brought in what's as close as we can get to a chequebook mortgage," Mr Dowling says.
Like all equity release products, OnePlan goes some way to breaking down the barriers between mortgage lending and other personal loans. But in Britain, divisions between mortgages, savings and current accounts have also been swept away. There, Barclays, Halifax and First Active offer products sometimes known as all-in-one mortgages.
Under these products, not only can consumer debts be added to the mortgage, but borrowings and savings can be combined in a current account. Instead of earning interest, the balance on the current account is deducted from the debt, promoting early repayment.
With some accounts, such as Virgin One, even the accountholder's monthly salary is credited to the account.
