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Mortgage rate cuts 'on the way' for PTSB customers

INDEPENDENT.IE -  Business Property & Mortgages

Donal O'Donovan and Charlie Weston
July 26 2019 2:30 AM

Mortgage customers at Permanent TSB are in line for cuts after the bank became the latest lender to indicate it will charge less for home loans.




It comes as Ulster Bank reduced one of its key variable rates, and Bank of Ireland reversed mortgage rate increases it announced at the start of the year.

Permanent TSB CEO Jeremy Masding hinted strongly the bank will cut the interest on some variable rate mortgages.

He also admitted tracker customers could also see a cut as there is now a prospect the European Central Bank will drop its key refinancing rate to a minus figure.

The bank chief would not be drawn on the specifics of a variable rate cut, but said it could go ahead even if the ECB cuts its main refinancing rate below zero for the first time.

Permanent TSB has one of the highest variable rates at 4.16pc.

An ECB cut below zero, which is now seen as a realistic prospect, would be passed on to tracker customers, Mr Masding said.

The average tracker interest rate is 1.28pc at Permanent TSB and trackers make up the bulk of its lending.

A negative ECB refinancing rate would be an issue across the entire Irish banking system, not just for Permanent TSB, Mr Masding said.

Even though lower tracker rates would be a big financial hit for the bank, a tracker rate cut would not stop the bank cutting variable rates, he said.

Banks are currently making profits on trackers, but a negative ECB rate would squeeze bank profit margins.
Markets are now convinced there will be a cut in what the ECB charges banks for keeping their cash, with the so-called deposit rate expected to go from -0.4pc to -0.5pc in September.

Markets are now pricing in a high probability of a cut in the refinance rate, which would directly benefit all those on trackers.


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We offer clients a full estate agent service including Property and Land Sales by Auction and Private Treaty, Valuations, Property Management, Lettings and Agri-Entitlements . Also Livestock Sales and Valuations for All purposes i.e. Insurance, Probate and Clearance/Reduction Sales.
Contact us at Robert Nixon & Co for a professional and friendly service when buying and selling property in the Meath, Cavan and surrounding areas. Our office is centrally located in Kells, Co. Meath.