Permanent TSB is no longer losing money on trackers
Permanent TSB has admitted it is no longer losing money on trackers.
A tracker has an interest rate set at the prevailing European Central Bank rate, which is zero at the moment, plus a margin which is usually 1pc.
This means a typical tracker mortgage holder is paying 1pc at the moment, compared with close to 4pc on a variable rate.
Banks were losing money on trackers as they were contractually unable to increase the margin, so they hiked variable rates for other customers.
But Brendan Burgess, of the Fair Mortgage Rates Campaign, said he was told at the recent AGM of Permanent TSB that its cost of funds was just 0.55pc.
A spokesperson for the bank confirmed "the group is no longer losing money on its tracker book".
AIB, Ulster Bank and Bank of Ireland said trackers are loss-making. KBC had no comment.