A FOURTH lender is set to give its customers the option of moving house and keeping their low-cost tracker mortgage, in a boost to the family home market.
KBC Bank, which issued one-tenth of all mortgages during the housing boom, will follow Permanent TSB with a tracker transfer deal next month.
KBC Bank will allow homeowners on a tracker mortgage to move the loan to a new property and pay a slightly higher premium on the tracker rate.
Both Ulster Bank and Bank of Ireland allow qualifying customers to transfer their tracker mortgage, but only for five years.
But it is understood that KBC will match Permanent TSB by allowing its customers keep the tracker rate for the full term outstanding.
AIB, which also controls EBS and Haven, said it was looking at introducing a tracker-transfer product also.
A spokesman for KBC said: "The bank will launch a tracker-transfer product in March."
Allowing customers to move house and keep their original tracker is seen as a key to freeing up properties for sale and helping restore the housing market to normality. These deals are expected to be mostly taken up by families, who may want to move house but are worried about losing their cheap tracker loans.
Permanent TSB boss Jeremy Masding said yesterday its new tracker transfer product would be available from May, but it would take queries from now.
The lender, which gave out one in five mortgages during the property boom, said that it would allow customers in negative equity to trade up or down. Negative equity is where the mortgage amount owed is greater than the value of the home.
Up to now, Permanent TSB customers on a tracker rate could not keep their tracker rate if they sold their house and bought a new one.
It said it now recognised that this policy was restricting customers from moving house or trading up or down.
Under its new initiative, Permanent TSB tracker customers will be able to keep a tracker interest rate to finance a new mortgage.
This rate will continue for the full term outstanding on their current tracker.
It said the new rate would have an additional charge of 1pc above their current tracker interest rate.
If families need to borrrow additional funds to buy the new house, they will finance this difference with a higher variable or fixed-rate home loan.
Permanent TSB says that it is the only bank where its customers can avail of a tracker interest rate for the rest of the mortgage's scheduled term.
The bank said that qualifying customers in negative equity can sell their homes and buy a new one by transferring the negative equity on their former property to the new one.
It said that limits will apply to the amount that customers can borrow in the event of trading down or trading up.
Mr Masding said: "This is a breakthrough initiative designed to open up the mortgage market for a segment of customers who have been effectively excluded for the past five years.
"It reflects our determination to find solutions that can help the market function better and that are fair to both customer and bank," he added.