Permanent TSB to increase fixed mortgage rates - East Coast FM

Image audioPermanent TSB to increase fixed mortgage rates - East Coast FM

Permanent TSB is to increase the cost of its fixed-rate mortgages for the third time since the summer. The bank is also raising the interest rates on its deposits for savers. 

New fixed-rate mortgages are set to be 0.75 percentage points more expensive. Daragh Cassidy, Head of Communications at appeared on East Coast FM to discuss the latest announcement from Permanent TSB (PTSB).

Listen back to the interview above or take a look at the main points below.

Main points from the interview

  • After the latest increase, PTSB’s fixed interest rates for new customers will be between 3.9% and 4.9%, which is a little higher than AIB and Bank of Ireland.
  • Theoretically, with Bank of Ireland, you could still get a rate of 2.9%, but it’s likely that Bank of Ireland and AIB will also increase their rates again over the next few weeks.
  • The European Central Bank is due to meet next Thursday and it’s expected to increase rates again by another half a percentage point. It will probably do the same again over the summer.
  • The latest increase would add around €130 to someone’s mortgage. It’s not an insignificant amount of money.
  • PTSB also increased rates in January and last November as well. 
  • To put this into perspective, this time last year PTSB’s cheapest rate was 2.2%, now its lowest rate is 3.9%.
  • Despite increasing savings rates, the best savings rate from PTSB is now going to be 1.5%, which isn’t a huge amount of money, especially with inflation so high.
  • Rising interest rates are always good for banks as they make good profits from them. There are a rocky few months and years ahead. 
  • Variable rates are remaining unchanged for now, but they will eventually go up as well.
  • People on tracker mortgages need to decide whether they should get rid of the tracker and fix, while rates are still somewhat low.
  • We’d recommend chatting with an independent financial expert or a broker.
  • It will be really tricky for first-time buyers. We will have to see if first-time buyers can afford these rate hikes, or if property prices will fall. 
  • The big fear is that as interest rates increase, building construction will fall behind. We need to be building around 50,000 houses to cope with demand, so it’s not looking good. 
  • Concerning energy prices, hopefully, we will see prices fall within the next 3 or 4 months. Pinergy announced a price decrease recently, but its prices are still quite high. 
  • The price of gas is beginning to fall on wholesale markets, so the longer it stays there, the more likely we are to see energy prices decrease.

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