Lenders to begin hiking fixed-rate mortgages
BANKS are expected to embark on a new round of hikes for fixed-rate mortgages after Permanent TSB withdrew the option to lock into a set rate.
The bank has some of the best fixed rates for first-time buyers borrowing less than half the value of the property.
But it emerged yesterday that these buyers can no longer get a competitive 3.1pc rate for two years.
Permanent TSB has also stopped allowing new customers the option of fixing for five years at 3.7pc.
In a note to brokers, the bank said it was temporarily suspending its two and five-year fixed rates for residential customers while it introduces new rates, which are expected to be far higher.
The bank's standard variable rate at 4.34pc is slightly higher than that charged by AIB.
Karl Deeter of Irish Mortgage Brokers said the bank was trying to force more people onto its variable rate.
The move would be a further disincentive to first-time buyers, who are anxious to buy a house before the end of the year to avail of generous mortgage tax reliefs that are due to go.
Mr Deeter said fixed rates at all banks would now rise.
Permanent TSB has the highest fixed rates for those whose mortgages are greater than half the value of their homes.
The bank charges 7.25pc to fix for two years, and 8.75pc for five years, according to information given by PTSB chief executive Jeremy Masding to Fianna Fail's Michael McGrath (inset).
A spokesman for the bank confirmed it was due to introduce a new range of fixed rates. He admitted the rates for new buyers would be higher, but said those for existing customers would be lower.
The Permanent TSB move to withdraw its fixed rates comes a week after it emerged that AIB and Bank of Ireland customers -- who are facing the prospect of big increases in variable rates -- have been advised that now is the time to fix.