Lender to hit homeowners with interest rate increase
Published 18/01/2010 | 05:00
ALMOST 70,000 Permanent TSB mortgage customers face the shock of another rate hike of as much as 0.5pc over the coming weeks -- adding €15 a month to average monthly repayments.
The loss-making bank sparked a massive public and political uproar last July by breaking ranks with other mortgage providers in adding 0.5pc to its standard variable rate, bringing it to 3.19pc.
Kevin Murphy, head of the bank's parent group, Irish Life & Permanent, signalled to analysts last November that the lender would be looking at its interest rates again in January as it looked at its margins for the entire year.
But sources last night said "it has gone from possible to probable" that Permanent TSB will hike its standard variable mortgage rate again by the end of this month, most likely by 0.5pc to 3.69pc.
The bank's remaining 120,000 home borrowers, who have either fixed-rate or tracker mortgages, which move in line with European Central Bank rates, will not be affected by the move.
Many commentators have been surprised that domestic rivals have held back for so long from following Permanent TSB leading in increasing variable rates last July.
But sources close to Permanent TSB claim that it is finding itself at a distinct disadvantage to rivals, by virtue of the fact that it stands alone among Irish banks in neither participating in NAMA nor requiring a state bailout.