Mortgages

Permanent TSB cut fixed mortgage rates

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Robyn Hamilton

Robyn Hamilton

Content Marketing Specialist

Permanent TSB announce fixed rate mortgage cuts of up to 0.4% for new and switching customers.

Some good news for prospective home buyers. Over the last couple of weeks all we’ve heard about is banks from AIB to Bank of Ireland and KBC cutting their savings rates, so it’s nice to hear a little positive news in the banking sector.

Effective from today, Permanent TSB has cut fixed mortgage rates from between 0.2 and 0.4 percentage points.

For a quick summary of the new rates, see the table below:
 

Fixed Rate Type

Old Rate

New Rate

1 Year Fixed Rate New Business greater than 80% and less than or equal to 90% LTV Mortgage

3.50%

3.30%

2 Year Fixed Rate New Business greater than 80% and less than or equal to 90% LTV Mortgage

3.90%

3.60%

3 Year Fixed Rate New Business greater than 80% and less than or equal to 90% LTV Mortgage

3.90%

3.60%

5 Year Fixed Rate New Business greater than 80% and less than or equal to 90% LTV Mortgage

4.15%

3.75%

How much will I save? 

So what does a rate cut of 0.4% actually amount to? Let's take a look at an example:

Let's say you are a first time buyer purchasing a home for €300,000 and taking out a mortgage of €270,000 starting on a 5 year fixed rate of 3.75%. Over a 30 year term your monthly repayments would amount to €1,250.41. On the old rate of 4.15% your monthly repayments would have been €1,312.48. That's a saving of €62.07 per month and a total saving of €22,345.20 over 30 years. Tweet this fact!

In the market for a mortgage? 

If you’re currently in the market for a new mortgage or you’re looking to switch mortgage providers it may be worth noting that although variable rate loans are the more popular option generally, fixed rate loans are becoming more and more popular these days.

You might be surprised to find that the net value of fixed rate mortgage drawdowns has been increasing steadily since the beginning of 2015 and fixed rate loans now make up 15% of the principal dwelling housing market in Ireland.

What are the benefits of a fixed rate mortgage?

With fixed rate mortgages comes certainty and peace of mind. More often than not, mortgage repayments are the greatest monthly outgoing for households and knowing exactly what you have to pay each month can be a huge aid to monthly budgeting.

The Irish property market is notoriously unpredictable and volatile and it doesn’t look like this is set to change any time soon; with this in mind it’s not surprising that more and more customers are opting for the stability of fixed rate loans.

Irish banks have been very slow to cut their standard variable rates, which in turn hasn’t instilled confidence in customers that they are likely to make dramatic cuts any time soon. The result is that customers are leaning more towards marginally more expensive, but guaranteed fixed rates.

Before you decide, always compare!

The mortgage application process is a difficult one fraught with stress and tension. Choosing your mortgage rate type is one of a number of key decisions you’ll make when buying a home and it’s important to have all of the information available before committing.

You can easily compare fixed and variable mortgage rates with our mortgage calculator.

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