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Move described as a “biggest innovation in mortgage pricing for existing customers ever by permanent tsb” – Ger Mitchell, Director of Lending

Savings of up to €10,000 for a homeloan customer with €100,000 mortgage on a home valued at €250,0001

(example based on a 20-year mortgage)

permanent tsb bank is to allow over 70,000 existing homeloan customers on Standard Variable Rate Mortgages of 4.5% to move to new mortgage interest rates which will start from as little as 3.7%2.

The new rates will vary depending on the amount owed by customers and the current value of their home. The highest rate charged (for customers who are in negative equity or whose mortgage is equal to 91% or more of the value of their home) will be 4.3%. This is 0.2% less than the current SVR.

The move will mean an end to the traditional SVR mortgage for homeloan customers that was based on a one-size-fits-all approach where one variable interest rate applied to customers irrespective of how much equity they had in the property.

The interest rates will be based on the following pricing bands.

Current Standard
Variable Rate
for Existing Customers
Managed Variable Rate
Available to Existing Customers
from September3
4.5% Outstanding Loan to Current Value Rate  
Less than or equal to 50% 3.70% - 0.8%
 51% - 60% 3.80% - 0.7%;
 61% - 70% 3.90% - 0.6%
 71% - 80% 4.00% - 0.5%
 81% - 90% 4.20% - 0.3%
 Greater than 90% (includes negative equity) 4.30% - 0.2%


Customers can start the switch process in August and the new Managed Variable Rate (MVR) pricing policy will be available from September. Customers will be required to apply to move to the new rates and the bank will pay for a valuation of their home to support their application. There is no credit assessment required of customers as this is on an existing loan.

The move could lead to very significant savings for existing customers. If the amount owed on a home is less than 50% of the value of the home today, the customer will be able to reduce their interest rate from today’s SVR of 4.5% to the new MVR of 3.7% (a cut of 0.8%).

Customers currently 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 they could move to an MVR mortgage sooner if they first break from their fixed rate subject to paying a breakage fee and other terms and conditions that might apply to their fixed rate).

Speaking today Ger Mitchell, Director of Lending, said the move would effectively mean the end of the SVR rate for tens of thousands of homeloan mortgage customers;

this is the biggest innovation we’ve undertaken in mortgage pricing for existing customers ever. It marks a fundamental shift in the way we treat our existing customers and will allow us to offer existing customers some of the most competitive mortgage rates in the Irish market.

In the coming weeks permanent tsb will write to over 70,000 homeloan customers on variable rates to advise them of the new policy and the steps they need to take to avail of the initiative. Ger Mitchell also confirmed that the Group would unveil a series of Discounted MVR rates for new business next week. He said;

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.

On the impact of the move on the Group’s finances, Mitchell said that the Group remains confident that it can achieve its previously communicated NIM target (Net Interest Margin) of 1.7 per cent by 2018.

Editors Note:

The new pricing model is available to homeloan customers only. It is not available for Buy To Let (BTL) customers.

1 This is based on a customer paying a current SVR of 4.5% and moving to an MVR of 3.7% with a remaining term of 20 years.

2 3.7% is the interest rate that will apply to a mortgage where the loan is 50% or less of the value of the house.

3 MVR rates are variable and may move up or down from time to time.

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