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Banks which fail to reward their loyal customers

CUSTOMERS of all the main banks are bracing themselves for increased mortgage repayments following Permanent TSB's interest rate hike.

Standard variable rate mortgages have been increased by PTSB by 0.5pc, adding about €58 a month to a €200,000 mortgage.

The move came as it emerged some banks are charging their own customers far more for fixed-rate mortgages than new borrowers.

Irish Banking Federation chief executive Pat Farrell said other lenders will find themselves in the same situation as PTSB.

He said banks are losing money on their mortgage books, a fact that will create even bigger difficulties for the taxpayer.

Homeowners on tracker mortgages, which are set at a fixed rate above the European Central Bank (ECB) base rate, are also facing the prospect of higher repayments.

Analysts have forecast that the ECB could hike rates towards the end of the year.

The higher repayments mean more misery for homeowners, many of whom are finding it difficult to keep up with their instalments. Around 3.3pc of Irish mortgage borrowers are at least three months in arrears.

The Government is setting up a panel of experts to advise it on how to deal with this growing category of mortgage holder.

Mr Farrell confirmed there will be no legal proceedings where a borrower engages with their lender.

Meanwhile, lenders are charging some of the highest rates for existing customers seeking to switch to a fixed-rate home loan, it has emerged.


New customers are offered rates up to 2pc cheaper from lenders including Permanent TSB, Bank of Ireland and KBC Homeloans.

PTSB offers a new customer the option of fixed for five years at 3.7pc. However, existing customers who wants to lock in to the five-year fixed rate will be charged 5.75pc.

PTSB said that it has always had discounted rates for new customers.

Bank of Ireland said it offers the lower rates to new customers to help them with the additional costs of buying a first home.