It's the second time the bank has hiked its variable rates in the past six months and could add over €60 a month to affected customers' repayments.
PTSB is the latest lender to hike its mortgage rates.
It’s increasing all of its variable rates for both new and existing customers from 17th January 2024.
Its fixed rates for both new and existing customers will largely remain unchanged...for now. And one of its fixed rates for new customers will actually fall. But more on that in a bit...
Going up
PTSB is hiking its Standard Variable Rate (SVR) by 0.40 percentage points to 4.70%.
It's so-called Managed Variable Rates (MVRs), which are linked to each customer’s loan-to-value (LTV) ratio, will also increase by 0.40 percentage points for LTVs of more than 80% and by 0.60 percentage points for LTVs of 80% or less.
Following the increases, the bank's MVRs will range from 4.40% to 4.70%.
Both changes will take effect from 17th January 2024.
The latest hike from PTSB comes in response to a big increase in interest rates by the European Central Bank (ECB) since July 2022. Over that time it has raised rates from 0% to 4.50%.
| Product | Loan-to-value ratio | Old rate | New rate | Approximate increase in repayments* |
| Standard variable rate | All | 4.30% | 4.70% | +€44 p/m |
| Managed variable rate | ≤60% | 3.80% | 4.40% | +€64 p/m |
| Managed variable rate | 60%-≤80% | 3.90% | 4.50% | +€64 p/m |
| Managed variable rate | >80% | 4.30% | 4.70% | +€44 p/m |
*If you have €200,000 remaining on your mortgage over 20 to 25 years
Going down
In better news, the bank is also reducing one of its key fixed rates for new customers.
It's cutting its four-year rate by 0.40 percentage points from 6th December and this will now be as low as 4% depending on how much of a deposit or equity a customer has.
This rate is only available to brand new customers though. If you have a tracker or a variable rate with PTSB for example you can't switch to this rate unfortunately.
| Product | Loan-to-value ratio | Old rate | New rate |
| 4-year fixed new business | ≤60% | 4.40% | 4.00% |
| 4-year fixed new business | 60%-≤80% | 4.50% | 4.10% |
| 4-year fixed new business | >80% | 4.85% | 4.35% |
PTSB is also increasing the savings rate on one of its deposit accounts.
The rate on its 40-Day Notice Account, which customers can open in a branch or online, is increasing from 0.01% to 1%.
However PTSB is paying rates as high as 3% on some of its fixed-term accounts.
Recent analysis by bonkers.ie has shown that Irish savers are collectively missing out on up to €3.5 billion in interest a year by not moving their savings into the best yielding accounts. You can read about that here.
And you can compare all savings and deposit rates across all the main providers by using our free savings account comparison service.
More rate hikes to come?
Although mortgage rates in Ireland are at their highest level in years, they’re still well below where one might have expected them to be given how high the ECB has raised rates over the past 18 months.
Thankfully it does look as if the ECB has ended its rate hike cycle, which will no doubt be a relief to tracker holders and prospective first-time buyers in particular.
The question now turns to when the ECB might start to cut rates.
Markets seem convinced the ECB will have to start cutting rates as soon as March or April due to plummeting inflation and a flagging Eurozone economy. However the ECB is adamant that it’s still way too early to talk about rate cuts and that the battle against inflation has not yet been fully won.
Regardless of what the ECB does over the coming months, it's unlikely Irish mortgage rates will broadly fall anytime soon. Except for tracker holders of course. Indeed we could still see some lenders hike their rates over the coming months. This is because Irish lenders have passed on less than half of the ECB rate hikes to date. However it has to be remembered that mortgage rates in Ireland were very high to begin with.
Both PTSB and Bank of Ireland have hiked their variable rates in recent weeks and it wouldn’t be a surprise if other lenders upped their rates again slightly over the coming months.
And whenever the ECB does cut rates, the main banks are unlikely to respond immediately given they’ve passed on so little of the previous hikes to date.
So in short, don't expect lower mortgage repayments anytime soon.
