Permanent TSB Group Holdings, formerly Irish Life and Permanent, is to end standard variable rate mortgage pricing for over 70,000 homeloan customers on request.
Ger Mitchell, the bank’s director of lending described the move as a “biggest innovation in mortgage pricing for existing customers ever”, with savings of up to €10,000 (£7,072) for a homeloan customer with €100,000 (£70,720) 20-year mortgage on a property valued at €250,000 (£176,810).
Over 70,000 existing homeloan customers on SVR mortgages of 4.5 per cent are expected to move to new interest rates from as little as 3.7 per cent on a ‘managed variable rate’.
Ciarán Long, the lender’s group secretary, explained that the rates will vary depending on the amount owed by customers and the current value of their home. The highest rate charged - for those in negative equity or whose mortgage is equal to 91 per cent or more of the value of their home - will be 4.3 per cent; still 0.2 per cent less than the current SVR.
Customers can start the switch process in August and the new managed variable rate pricing policy will be available from September.
Those on fixed rates will be able to elect to move to an MVR mortgage as one of their options at the maturity of their fixed rate, or sooner if they first break from their fixed rate subject to paying a breakage fee and other terms and conditions.
Mr Mitchell said that the change marks a fundamental shift in the way they treat existing customers, allowing the bank us to offer some of the most competitive mortgage rates in the Irish market.
He also confirmed that the group will unveil a series of discounted MVR rates for new business next week. “As part of our mortgage drive, we will offer new customers discounts on our MVR rates for up to 12 months to help them as they take on a new mortgage.”
The new pricing model is available to homeloan customers only and not for buy-to-let customers.
peter.walker@ft.com
