Sunday 25 June 2017

Permanent TSB 'charging double' its rivals to fix rate

Permanent TSB is now 75pc-owned by the tax-payer. Stock picture/Collins
Permanent TSB is now 75pc-owned by the tax-payer. Stock picture/Collins
Charlie Weston

Charlie Weston

A state-rescued bank has been accused of exploiting its mortgage customers by offering those who want to fix an interest rate that is more than double what other banks are charging.

The bank has a two-year fixed rate of 7.25pc for existing residential customers. Its three-year rate is 8.75pc.

It comes as there are fears rock-bottom wholesale interest rates could start to rise in the next year or so.

Permanent TSB had in the past the highest variable and fixed rates but had reduced these after criticism.

Mortgage broker Karl Deeter accused the bank of "gouging" loyal customers who want to fix.

"We in the industry had thought Permanent TSB had stopped doing this. We were not aware it had started gouging again. Charging 7.25pc for a two-year fix is unacceptable," he said.

He said it was a strange move by the Jeremy Masding-run bank as it was attempting to increase its presence in the market.

Permanent TSB is now 75pc-owned by the tax-payer.

Mr Deeter, of Irish Mortgage Brokers, added: "They are charging double the normal rates.

"The rates are off the charts."

Asked why the bank was charging so much, he said it was to discourage people moving off variables, as they allow the bank more flexibility to increase interest rates.

He added that the high rates reflected the fact the bank was still finding it expensive to raise funds.

Defend

A Permanent TSB spokesman did not try to defend the high fixed rates when asked how it could justify them.

"These rates will be withdrawn very shortly and replaced with a new suite of fixed-rate products for existing customers which will represent a quantum improvement compared to the rates currently available."

The bank's spokesman added that it expected the lower rates to be available from late June.

Irish Independent

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