Homeowners hit by rate hikes as Permanent TSB hikes rates on fixed rate mortgages

Permanent TSB is the latest lender to increase its mortgage costs in response to rising European interest rates.

The lender increases its fixed rates by an average of 0.45 percentage points Irish Independent have learned.

The higher rates increase the monthly repayment installments by around €60 for a typical new fixed-rate mortgage of €250,000.

The bank is understood to be giving those with mortgage approvals 90 days to draw down at rates in effect prior to this latest increase, or by February 15. This applies to first-time buyers and those switching.

Some PTSB savings rates are also increasing, as is natural. This is in contrast to other banks, which have resisted raising deposit rates despite three large hikes by the European Central Bank (ECB).

Permanent TSB’s variable mortgage rates will not increase, the lender will announce this morning.

Permanent TSB’s variable interest rate is already lower than some other lenders.

This means that 56,000 mortgage holders whose loans have been transferred from Ulster Bank to Permanent TSB will benefit from Permanent TSB’s lower variable interest rate.

Ulster Bank’s floating rate is 4.3 per cent, but the permanent TSB has a rate of 3.95 per cent. This means a saving of more than €200 per year per €100,000 loan.

Last week, the Bank of Ireland raised interest rates on its fixed-rate mortgages for new customers by 0.25 percentage point. And AIB recently raised its fixed rates by 0.5 percentage points.

That’s half the increase in fixed rates announced by competitor AIB.

The Bank of Ireland’s new interest rates came into effect last week for new borrowers and those switching.

This means the bank’s top rate of 1.9 percent for those borrowing more than €400,000 without repayment increases from 1.9 percent to 2.15 percent for new borrowers and bills of exchange.

However, the new tariffs will have no impact on existing BoI customers who reach the end of a fixed tariff. You will still be able to hold on to the rates that were in effect before the last increase.

There is no increase in variable interest.

Banks here have resisted bearing the full impact of a series of recent ECB rate hikes.

Frankfurt’s central bank has raised its refinancing rate from 0 to 2 percent in three chunky hikes since the summer, with one more
Jumbo surge expected next month.

However, tracker customers automatically face higher interest rates from all lenders, matching the three record hikes announced by the European Central Bank in the last four months.

Bonkers.ie’s Daragh Cassidy said the ECB will almost certainly hike rates by another 0.5 percentage point at its next meeting on December 15 and into the new year.

“So it’s likely that we will unfortunately see more rate hikes from Permanent TSB and all other lenders in the coming months.”

The non-bank lender ICS has already announced several interest rate hikes and severely restricted its new lending.

Finance Ireland has announced large increases in its interest rates and suspended its long-term interest rates of 10 years or more just a year after their introduction. Avant Money has also increased its prices.

The ECB now pays 1.5 percent for bank money deposited with it, leading to calculations that the three largest banks here will earn 1 billion euros on deposit and loan spreads if the ECB starts stimulating rate hikes.

https://www.independent.ie/irish-news/homeowners-hit-by-rate-rise-as-permanent-tsb-raises-interest-on-fixed-rate-mortgages-42153755.html Homeowners hit by rate hikes as Permanent TSB hikes rates on fixed rate mortgages

Fry Electronics Team

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