Permanent TSB is latest bank to cut its rates on fixed mortgages
Permanent TSB announced yesterday it will drop its fixed-term rates on Tuesday, making its mortgages more competitive - although still at the expensive end of the Irish market.
The bank said it would cut its interest rate on five-year fixed mortgages by half a percentage point to 3.2pc.
Three-year mortgages will be reduced by 0.45 points to 3.25pc, while two-year mortgages will be reduced by 0.4 points to 3.3pc. All three products previously bore a 3.7pc rate of interest.
"We have enjoyed great success in growing our market share in new business over the past few years. Customers are showing strong demand for fixed-rate options as they seek to lock in lower rates for longer. These rate cuts offer value to our existing mortgage customers," said Laura Temple, head of mortgages at PTSB.
"We're not finished in this space and continue to keep all our rates - fixed and variable - under review."
On Thursday, KBC Bank said it would cut its two-year mortgages by up to 0.3 percentage points and 10-year mortgages by up to 0.55 points, meaning its fixed-term mortgages would charge 2.25pc to 3.2pc rates of interest.
Those discounted rates require customers to link their mortgages to a KBC current account which automatically receives monthly deposits.
Last week, Ulster Bank reduced a key variable rate, and Bank of Ireland reversed rate hikes imposed at the start of the year. AIB cut rates in April.
The Irish cuts follow European Central Bank president Mario Draghi's July 25 signal that the ECB's already rock-bottom rates could be cut further in September.
He said ECB interest rates would remain "at their present or lower levels" at least to mid-2020.
The central bank is already lending to banks at a zero rate of interest and even lower - effectively paying banks to borrow - in cases where those banks promise to lend the funds into their sluggish economies.
Most Permanent TSB mortgage customers already enjoy tracker mortgages, which charge an average rate of just 1.28pc. In May, following an investigation, the Central Bank fined Permanent TSB €21m for denying tracker products to more than 2,000 customers between 2004 and 2018. The bank was ordered to pay the customers €54.3m in redress and compensation and to put the 2,000 customers back on tracker rates.