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Mortgages

Mortgage holders could save close to €300 a year with latest rate cuts from PTSB

Daragh Cassidy

Daragh Cassidy

Head Writer

Borrowers benefit as the bank becomes the latest lender to reduce its rates.

Permanent TSB has become the latest lender to reduce its mortgage rates in what has become an increasingly competitive market. 

In August KBC slashed its 10-year fixed rate for first-time buyers by 0.55% while Ulster Bank reduced some of its fixed mortgage rates last week, having reduced one of its key variable rates in July. 

Among the changes, PTSB is reducing its three-year and five-year fixed rates for first-time buyers by 0.20% while its three-year fixed rate for those with a 40% deposit, and who are borrowing over €250,000, has been reduced by 0.10% to 2.65%, the lowest rate now offered by the bank.

Big savings

According to the Banking & Payments Federation Ireland (BPFI) the average first-time buyer borrows around €225,000. So these changes mean that the average person or couple borrowing this amount over 30 years would save almost €300 a year by availing of Permanent TSB’s new five-year rate for example. 

What are Permanent TSB’s new rates?

Term 

Current

New

Change

3-year fixed <=60% LTV

2.85%

2.80%

-0.05%

3-year fixed <=60% LTV

(high-value mortgage)

2.75%

2.65%

-0.10%

3-year fixed >60% & <=80% LTV

2.90%

2.85%

-0.05%

3-year fixed >60% & <=80% LTV (high-value mortgage)*

2.80%

2.70%

-0.10%

3-year fixed >80% & <=90% LTV

3.10%

2.90%

-0.20%

5-year fixed <=60% LTV

2.95%

2.90%

-0.05%

5-year fixed <=60% LTV

(high-value mortgage)*

2.85%

2.75%

-0.10%

5-year fixed  >60% & <=80% LTV

3.00%

2.95%

-0.05%

5-year fixed >60% & <=80% LTV

(high-value mortgage)*

2.90%

2.80%

-0.10%

5-year fixed >80% & <=90% LTV

3.20%

3.00%

-0.20%

*high value mortgage refers to loans above €250,000

Who are the new rates available to?

The new rates will be available to new customers only and come into effect from today, 13th September. The rates are available to first-time buyers, movers and switchers.

I’m an existing customer - what are my options?

If you’re an existing customer of Permanent TSB you still have a few options:

  1. If you’re on a variable rate then see if you can move to a lower rate based on the loan-to-value ratio of your home. Banks price interest rates differently depending on how much equity is in your home. The more equity you have, the lower the rate you’ll be charged. Most first-time buyers have a deposit of 10 to 15%, meaning they have this much equity in their home initially. But as you pay off your mortgage and as the price of your home gradually increases, your level of equity will improve. So chat to PTSB about what it can offer you. Most mortgage holders can move onto a lower rate in this way at least once during their mortgage term.
  2. If you’re on a variable rate then consider switching to one of the fixed rates that the bank offers its existing customers. Fixed rates are now generally lower than variable rates. 
  3. If you’re still not happy, then look at switching. Although gradually improving, switching rates are still too low, which is crazy given the potential savings involved. And while there are some upfront costs associated with switching mortgage provider, in some cases banks will provide a cashback incentive to those who switch or a contribution towards the legal fees. Right now someone with €200,000 remaining on their mortgage over 20 years, paying a 4.3% rate, could save over €200 a month by switching.  

What’s the outlook for mortgage rates?    

Permanent TSB’s reduction in rates is fairly unsurprising given the recent reductions by Ulster Bank and KBC and is good news for mortgage customers in Ireland. The question now is how much further downwards rates will go.” 

Earlier this year Bank of Ireland’s chief financial officer had publicly suggested that interest rates had gone as low as they could in Ireland. The bank subsequently got into trouble from the Competition and Consumer Protection Commission (CCPC) for 'price signalling' to the market. But these recent moves from the main lenders, as well as a potential rate cut from the ECB due to a slowing world economy, suggest there may be room for further cuts in the near future. 

In addition, ICS recently moved into the residential mortgage market while An Post is also due to enter the market shortly, which should increase competition greatly and put further downward pressure on rates. So watch this space.    

Compare the market  

The rates on offer from Permanent TSB may not be the lowest on the market or the best for your particular circumstances. So be sure to compare all rates across all providers before you make any decisions. And you can do that in seconds right now on bonkers.ie with our free, easy-to-use mortgage calculator. 

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