New PTSB chief cuts mortgage rates

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Permanent TSB’s (PTSB) new chief executive, Eamonn Crowley, is rejigging the lender’s mortgage offering by cutting its standard variable rate for the first time in six years and removing much of the advantage new customers have over existing borrowers when fixing rates for a period.

The development comes as Spanish bank Bankinter’s Leitrim-based finance company, Avantcard, announced on Tuesday it would offer mortgages in Ireland from the autumn through brokers – becoming the first overseas-owned lender to enter the market since Danske Bank’s ill-fated takeover of National Irish Bank in 2005.

PTSB will cut its standard variable rate next week for all customers to 3.95 per cent from 4.5 per cent, a rate that has ranked alongside Bank of Ireland’s as the highest in a market where mortgage costs are the fourth-highest in the euro zone.

The average new loan rate in the Republic was almost 2.9 per cent in May, more than double the euro-zone average, according to the Central Bank. This is partly down to the higher level of expensive capital that Irish banks must hold as a legacy of the scale of the domestic arrears crisis following the crash.

Up to €250,000
Irish banks have been pushing fixed rates over variable rate products in recent years. PTSB is also cutting fixed rates available to existing customers to match those being offered to new customers on loans of up to €250,000. But customers on existing fixed-rate products will have to wait until after the maturity of their current fixed term.

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Meanwhile, new customers taking out mortgages of more than €250,000 will still be offered more favourable rates than existing PTSB clients – as low as 2.5 per cent for three-year terms.

“This move goes a long way to addressing the discrepancy which traditionally existed between our pricing for new and existing mortgage customers,” said Mr Crowley, who took over the helm last month. “We will continue to evolve our mortgage pricing strategy in this direction as we go forward in line with our ambition to further build trust with customers.

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