Permanent TSB increases variable mortgage rates by up to 0.4%

The lender said the changes follow the ECB's interest rate hike last week, increasing its rates by 4% in less than a year

"The changes being announced today follow ECB rate increases totaling 4.00% over the past 12 months," said the bank, adding that Buy-to-Let customers will also be impacted by the PTSB's updates rates. Picture Dan Linehan

Permanent TSB has announced increases in the bank's mortgage variable rates by up to 0.40% following last week's eighth interest rate hike by the European Central Bank.

Taking effect from the 31st of July, variable mortgage rates will increase by between 0.05% and 0.40%, with no additional changes in fixed rates, which rose by 0.75% in March this year.

The lender's standard variable rate (SVR) for homeloans will increase by 0.35% to 4.30%, while homeloan managed variable rates (MVRs), which are linked to each customer’s loan-to-value (LTV), will increase by between 0.05% and 0.40%. Following these increases the MVRs on homeloans will range from 3.80% to 4.30%.

The bank said that just 5% of new business seek a variable rate in light of continuous ECB hikes, with fixed mortgage rates accounting for the remaining 95% of accounts.

"The changes being announced today follow ECB rate increases totaling 4.00% over the past 12 months," said the bank, adding that Buy-to-Let customers will also be impacted by the PTSB's updates rates.

Also announced on Tuesday, the bank said it would increase fixed and variable rates for BTL mortgage customers and would be ending fee waivers on legacy current accounts that are no longer available to new customers.

Last week, the ECB enacted its eighth interest rate hike in less than a year, with its main refinancing rate rising in total by 4% since July 2022. With additional rate hikes already predicted, mortgage holders on variable and tracker rates have been repeatedly advised to consider all options available to reduce their exposure to interest rate volatility.

The bank's deposit rate, which rose by 0.25% last month comes into effect today, increasing offerings up to 1.5% despite recent rate hikes of up to 2% by AIB and continuous calls to pass on ECB deposit rate hikes onto consumers. 

With many Euro Area countries offering deposit rates of more than 3% following the ECB hiking rates to 3.5%, Irish banks have been slow to pass on these increases to the domestic economy, with mortgage rates largely offsetting saving rates.