PTSB's 0.5pc rate cut twice expected move
SOME 75,000 homeowners will save hundreds of euro this year after Permanent TSB yielded to pressure to reduce its interest rates.
The lender will reduce its variable rate by 0.5pc from Monday week in a move that will save homeowners €26 a month for every €100,000 borrowed.
The rate cut was twice as big as the 0.25pc that was expected -- and means a homeowner with a €300,000 mortgage will see their repayments go down by €78 a month, or close to €1,000 over a full year.
But the rate cut did not go far enough for many Permanent TSB variable rate customers and those campaigning on their behalf.
They pointed out that the variable rate will drop from 5.19pc to 4.69pc, and will still be one of the highest in the market.
Consumer advocate Brendan Burgess of the Askabout money.com website said there was scope for further cuts. He said Permanent TSB's rate for new borrowers was almost 1pc lower than the new variable rate for existing borrowers.
People with a €200,000 variable rate mortgage with AIB will still be paying €150 a month less than those with the same sized mortgage with Permanent TSB, even after the rate reduction.
But the bank held out the prospect of more cuts.
Chief executive Jeremy Masding said Permanent was keeping its lending rates under regular review.
Yesterday's move by Permanent TSB will mean that Ulster Bank variable rate will now be the highest variable rate at 4.75pc.
This compared to AIB, which is as low as 3.04pc.
Asked if it had any plans to reduce its variable rate, a spokeswoman for Ulster Bank said it was keeping its mortgage rates under continual review.
Meanwhile, hopes of a new ECB rate cut have faded for the country's 400,000 tracker mortgage holders.
The ECB meets tomorrow, but another cut is unlikely as German members of the ECB's governing council have been warning of inflationary pressures potentially building up.
This is despite calls from the IMF asking for rates to fall from 1pc to stimulate growth in the eurozone.