PTSB – another mortgage rate rise?

It has been reported in the Sunday Business Post that PTSB  (Permanent TSB) are planning another half percent rise to variable mortgages for existing customers.
The last PTSB rate rise back in July 2009 sparked a lot of reaction and we even saw protests on the streets and the setting up of the Irish Peoples Union! (What good did they do?)
PTSB it seems –  developed an overreliance on the wholesale funding market. Also, – a large proportion  of Permanent TSB’s €40 billion loan book is made up of tracker mortgages that are costing  more to fund than the bank receives in monthly payments from borrowers.

The actual PTSB standard variable rate each customer is on could be different . The number of PTSB customers affected could be somewhere between 50,000 and 70,000 – the actual number is not known.
A  PTSB borrower with a mortgage of  300k over 25 years will see repayments increase by about €80 a month if these rate rises are correct.

Moving on  to one of PTSB’s fixed rates is not really a viable option – they range from 5.25% to 6.1% . Switching to another lender with better rates may be possible for some borrowers  – but not all.  Anyone who owes more than 80% of the value of the house may find it difficult to switch . If you owe less than 80% – i.e your LTV is less than 80% – it might be worthwhile considering a switch. No harm in asking !
Of course – there is nothing to stop the other Irish lenders from raising their standard variable rates in the near future – so a switch to another lender’s variable rate may not save you very much . There are legal fees involved in  switching –  anything from €500 to €1000 and a valuation fee of around €100 to €150.
We wrote here about some pros and cons of switching to a fixed rate a few days ago.
There are 5 year fixed rates still available as low as 3.86% (AIB) and 3.99% (BOI)
There are also  3 year fixed rates as low as 3.15% (Irish Nationwide).