Mortgage Interest Rate War Heats Up

Mortgage Interest Rate

Permanent TSB latest to reduce their rates

So, the mortgage interest rate war continues. It is even more important now to check if switching your mortgage is possible.
Shop around: Borrowers should consider switching for better value.

Independent 9th March
Charlie Weston
March 09 2020 02:30 AM

Permanent TSB becomes latest lender to lower its mortgage rate in price war

Another bank has lowered its mortgage rate as lenders continue to compete hard for a share of the home-loan market.
Permanent TSB has lowered its seven-year fixed rate by 0.2pc to as low as 2.9%, and maintained this was the most competitive rate over that time period.
It is the fourth in a series of rate reductions the bank has announced in the past 12 months.

However, the rate only applies to new borrowers, which means that existing customers on a variable rate, or those coming to the end of a fixed rate, will not be able to get it.

Permanent TSB’s move comes after AIB, Ulster Bank and KBC Bank all reduced fixed rates – moves that now put more pressure on Bank of Ireland to react.
Permanent TSB’s seven-year rate falls to between 2.9pc and 3.15pc from the start of this week, depending on a customer’s loan to value rate.
Average first-time buyers borrow around €225,000. This means that it will now be €25 a month cheaper to opt for the Permanent TSB seven-year rate.
Over the course of the seven-year term this will save a new buyer €2,000, if they have a 10pc deposit and borrow over 30 years.

Asked why the new rate only applies to new customers and won’t be offered to existing customers, the bank said it had already reduced its three and five-year rates for existing customers.
“We intend to review rates further for existing customers in the coming months,” it added.
Head of lending at Permanent TSB Laura Temple said: “We will continue to keep all our rates – both fixed and variable – under review for new and existing customers.”
Permanent TSB saw its share of the new mortgage market rise to 15.5pc last year as customers reacted positively to the offer of 2pc cash-back on the amount borrowed, and 2pc back on the monthly payments.

Two weeks ago AIB reduced its mortgage rates, signalling a renewed intensity in the rates war.
Mortgage interest rates have been steadily falling over the past few years, with keen value now available for those locking in to fixed rates.
AIB cut its three-year and five-year fixed rates, and its “green” fixed rate.
They are coming down by up to 0.3pc.

Lower rates are also being introduced by AIB’s Haven operation, which is mainly focused on mortgages sold through brokers.
AIB is the largest mortgage provider in the State. Its decision to cut its rates will pile pressure on the other big player, Bank of Ireland.
AIB is cutting its three-year fixed rate by 0.3pc to 2.55pc and its five-year fixed also by 0.3pc to 2.55pc.
Meanwhile, its green five-year rate goes down by 0.05pc to 2.45pc.

Daragh Cassidy, of product comparison site Bonkers.ie, said interest rates for new mortgage customers are now down as low as 2.2pc to 2.3pc.
But he said that many existing mortgage holders, apart from those on trackers, will be paying far higher rates.
His advice to those people is to consider switching to get better value if your existing lender isn’t prepared to provide it.
No one should be paying more than 3.5pc, said Mr Cassidy.

Advice

Shop around. Whether you are a first time buyer or have a mortgage of years, it has never been more important to know whats on offer.
If you have a mortgage already you may be able to switch providers and save. Always get advice though before you switch.

Warning: If you do not keep up your repayments you may lose your home

Warning: You may have to pay charges if you pay off a fixed-rate loan early.

Warning: The cost of your monthly repayments may increase.

Warning: If you do not meet the repayments on your loan, your account will go into arrears. 

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