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Bank bucks trend with low variable rates on new mortgages

PERMANENT TSB is set to buck the trend of rising mortgage rates with new offers it claims will make it the most competitive in the market.

The five new rates, which are available from next Wednesday, are mainly aimed at first-time buyers.

The bank claimed it would have the cheapest rates in the market for four of these.

Director of lending at Permanent TSB Ger Mitchell said the new rates would be for firsttime buyers, switchers and people moving house.

But people will only be able to switch their mortgage to the bank if they are not in negative equity and existing borrowers will remain on the bank's variable rate of 4.34pc.

The bank is to offer lending rates based on the amount of a deposit a borrower has. These are called "loan-to-value" rates.

Contrast Permanent TSB's move to lower rates is in contrast to AIB, EBS and Haven, which this week announced rate rises for new and existing customers of up to 0.4pc.

AIB's variable rate for residential customers will rise by 0.4pc to 4.4pc. At EBS, the owner-occupier rate will jump by 0.25pc to 4.58pc.

And Haven's rate goes up by 0.25pc to 4.6pc – one of the highest variables in the market.

Mr Mitchell told staff yesterday that anyone borrowing 50pc of the value of the house they are buying will get a rate of 3.95pc. This is 0.39pc lower than the standard variable rate.

Up to now new borrowers got a discount rate of 3.99pc for a year, and then reverted to 4.34pc. Someone with a deposit of 30pc of the property's value will get a rate of 4.15pc, with 4.45pc the rate for those with a deposit of 10pc.

Mr Mitchell said: "This is a much more sophisticated pricing model for new mortgages which will allow us to reward new customers who have a lower risk profile."

Online Editors