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  • “More sophisticated model will match pricing to risk”
  • Move will mean significantly lower variable rates for switchers and other new customers

permanent tsb bank is to overhaul the bank’s pricing model for mortgages from Wednesday of this week. Ger Mitchell, the Director of Lending at the bank has announced that from Wednesday the bank will charge new customers different variable rates depending on the size of the mortgage relative to the value of the property. For purchasers borrowing less than 50% of the value of the property, the new variable rate will fall to 3.95% (a reduction of 0.39% from the current SVR of 4.34%). For those borrowing at higher LTVs (Loan To Value) ratios, the variable rate will increase through various stages as per the table below.

Ger Mitchell has confirmed that the new rates will be available to “switchers (people moving their mortgage from their current bank but not selling their home) as well as First Time buyers and those simply selling their home and buying a new one.

The new rate model will replace the use of the Standard Variable Rate (SVR) for new customers. That rate today stands at 4.34%. (This rate is typically discounted for new business for a period of 12 months before reverting to the SVR for the remainder of the mortgage). You can check out our mortgage rates here.

Speaking today Ger Mitchell, Director of Lending at permanent tsb, said;

This is a much more sophisticated pricing model for mortgages which will allow us to reward customers who have a lower risk profile while charging a higher rate from customers who represent a higher risk by virtue of the amount of money they are borrowing relative to the value of the property.

The move will see permanent tsb bank take a leadership position in the market in key market segments; the bank will provide lowest rates in four of the five categories.

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