Permanent TSB latest lender to hike its mortgage rates

In a widely expected move, Permanent TSB has followed its main rivals AIB and Bank of Ireland in increasing its fixed mortgage rates. Though variable rate customers have been spared for now.

The hike comes after the ECB has raised its main lending rate from 0% to 2% over the past few months.

What's changing?

Permanent TSB (PTSB) is hiking its fixed rates by between 0.05 and 0.90 percentage points.

The exact increase depends on the length of the fixed term, the size of the loan, and the size of the loan relative to the value of the property i.e. the loan-to-value ratio.  

So for example PTSB's seven-year fixed rate of 3.00% for those with a 10% deposit will go up to 3.90%. Its popuIar five-year green rate, again for those with a 10% deposit, will go from 2.80% to 3.65%. And its cheapest rate - a four-year fixed rate of 2.05% for those with a 20% deposit - is now 2.70%.

On average the bank says its rates are going up by 0.45 percentage points. 

For the moment, PTSB's variable rates will all remain unchanged. However these were very high to begin with. 

Those already on fixed rates obviously won't see a change either. PTSB has also confirmed that its existing variable-rate customers and those looking to re-fix can now access the same fixed rates as new customers with the exception of one introductory offer. Before this, PTSB charged its existing customers a higher rate than new customers.

PTSB's tracker customers aren't affected by today's news - but they've already had the two percentage point increase announced by the ECB passed on to them, as required under their contracts.

Here's a look at some of the new fixed rates from PTBS. 

I'm in the middle of applying for a mortgage?

If you're in the middle of applying for a mortgage with PTSB you still have plenty of time.

Customers who have already been approved for a mortgage have until 15th February 2023 to fully draw down their loan and avail of the previous lower rates. Switchers also have until this date to avail of the cheaper rates. 

This three-month notice is much longer than the one-month notice period AIB and BOI gave their customers when they hiked their rates recently and it comes after Finance Ireland was heavily criticised for initially announcing a rate rise that was due to come into effect within a week.

If you start your application or get approval for a mortgage with PTSB after today the higher rates will apply regardless of when you draw down your loan.  

Expected news

Today's news was expected given recent moves by the ECB, which has raised rates three times to 2.00% since July in a bid to combat soaring inflation, which is running at 9.2% in Ireland and 10.6% in the Eurozone. 

The main retail banks banks are part able to fund their mortgages through their vast deposit books so are less exposed to rising costs on capital markets. This means they were able to hold off on increasing their rates for longer than their smaller rivals such as Avant Money and Finance Ireland. But it was only a matter of time before they eventually passed on at least some of the ECB increases.  

Unfortunately the ECB is expected to increase rates again to 2.50% in mid December. 

And markets are forecasting that the ECB will hike rates to 3% or 3.25% in early 2023. 

So more rises from PTSB and the other lenders over the coming months are almost a given, unfortunately.

What about deposit rates?

Irish savers have been getting a pretty poor deal of late. 

In fact, the interest being paid on deposits in Ireland is the lowest in the Eurozone. 

Thankfully PTSB is also increasing its deposit rates. Its regular saver account will now offer 0.40% AER (up from 0.20%) and its five-year fixed-term account will now pay 1.25% AER. 

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