# PTSB reduces mortgage rates for existing customers



## tommyryan55 (1 Jul 2015)

SVR announcement is on the Irish stock exchange website. Cant post link


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## Brendan Burgess (1 Jul 2015)

[broken link removed]


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## Brendan Burgess (1 Jul 2015)

*07.00am Wednesday 1st July 2015.* *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%**.

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.





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_.”  

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


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## Brendan Burgess (1 Jul 2015)

I welcome the principle that existing customers will be treated the same as new customers.  This is one of the fundamental demands of the Fair Mortgage Rates Campaign. 

This is good news for those on low Loan to Values. Someone with an LTV of 60% will see their rate reduced to 3.8%.  

But someone in negative equity or with an LTV greater than 90% will still be paying 4.3% and can do absolutely nothing about it. 

*Compare and contrast with Bank of Ireland *

They still treat new customers better than existing customers.   Existing customers pay 4.5% variable while new customers can get rates as low as 3.9% variable.  New customers can fix for just one year, whereas existing customers must fix for two years to get a lower rate. 

If I were in deep negative equity, which lender would I prefer to be a customer of?  Clearly Bank of Ireland.   I will be paying ptsb a variable rate of 4.3% after these cuts, whereas I can get a fixed rate of 3.75% from Bank of Ireland, as long as I fix for two years. 

KBC is something similar.  The SVRs remain high, but I can fix for lower rates.


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## twofor1 (1 Jul 2015)

I can’t see it mentioned but am wondering will one be able to move down the Managed Variable Rates as their LTV decreases over the years, or if your current LTV is say the higher bracket, will you remain there for the entire term ?


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## Brendan Burgess (1 Jul 2015)

Hi twofor1 - I wondered that myself. It's not mentioned in the press release. 

Brendan


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## AAM_User (1 Jul 2015)

I'm guessing this would not be a good move for those hoping to get their tracker back from PTSB.  Equally it's possible they've announced this now in the hopes that some people will avail of it before they make the official offers.


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## ClubMan (1 Jul 2015)

AAM_User said:


> before they make the official offers.


What do you mean by "official offers"?


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## bdecuc (1 Jul 2015)

As a customer in negative equity with ptsb a reduction from 4.5% to 4.3% is deeply disappointing. No option to fix. No option to move banks. A very underwhelming outcome. I wonder how Minister Noonan views it?


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## random2011 (1 Jul 2015)

Have to agree with you bdecuc..this is simply not enough. It's a big kick in the teeth for those in NE. I am outraged today.
I was in BOI this morning and when speaking with one of their team the topic of switching mortgage came up. He took some numbers and although I advised I was in NE he said they're may still be an option to switch to their fixed rate which I believe is about 3.7% - 3.9%

@ AAM_User..if anyone is waiting to get their tracker rate back then I am assuming they are the ones affected by the central bank investigation and therefore I think it would be crazy to accept this offer even if your LTV is low and the best you can get is 3.7%. I doubt the bank are thinking like that but then again some people could fall for it I guess.


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## AAM_User (2 Jul 2015)

ClubMan said:


> What do you mean by "official offers"?



Supposed to be letters going out last month to people affected


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## tommyryan55 (15 Jul 2015)

Has anyone got a letter yet regarding this announcement?


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## Agent 47 (15 Jul 2015)

Still waiting with baited breath for the letter from PTSB on this. They would put you off mortgages for life.


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## ClubMan (15 Jul 2015)

The rates seem to be effective from September so still plenty of time for them to write to borrowers?

Oh - and as usual the banks throw in yet more jargon (MVR) to confuse the average punter.


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## bdecuc (17 Jul 2015)

As a constituent of Minister Howlin's, I wrote to him a couple of weeks ago following PTSB's announcement of its 'MVRs' at the start of the month.  I asked for Min. Howlin's views on NE customers like myself seeing a miserly rate reduction of 4.5% to 4.3%.  I described how people in my circumstances have no options to switch to another bank and have no options to switch to a cheaper fixed rate.  In other words we have no options.

I got a letter back to say that '_the Minister for Finance undertook, in the event of insufficient progress on mortgage reductions by September, to consider imposing a penal bank levy in the Budget or bringing forward legislation for the Central Bank to regulate interest'_.  Min. Howling said that in the meantime he had asked PTSB for an explanation of its response to Min. Noonan's request for rate reductions, citing my example, and he'd keep me informed of any reply he received.

The Minister forwarded on PTSB's reply today.  I've set it out below for info.  There's nothing in it that lots of people who follow this campaign won't already know to be honest...

Dear Minister,

Thank you for your recent correspondence on behalf of a constituent.

The rate reduction which your constituent refers to, is part of a very significant change which the bank has made to the pricing model it operates for existing home loan mortgage customers.

This change was announced earlier this month and will lead to reductions in monthly interest rates of as much as 0.8% for many of our existing borrowers.  It will also mark the first time in the Irish market that existing, as well as new home loan mortgage customers, will be able to access more competitive rates of interest depending on the size of the loan relative to the current value of their home.  As such, it marks an end of the so-called "standard variable rate" ('SVR') mortgage for our home loan customers.

In launching this new model, we were very conscious that all existing borrowers should be able to benefit from its introduction.  With that in mind we ensured that even home loan borrowers in negative equity could avail of a reduction in their interest rate of 0.2%.

We would have been delighted to have been able to ensure a higher reduction for customers in negative equity.  Unfortunately, that is not possible both given the relatively high cost of funds which we face at present and the higher risk of those in negative equity (in simple terms, any change in circumstances would mean a higher probability of the taxpayer losing capital over and above the value of the home).

In terms of the bank's cost of funds, many commentators contrast the mortgage rates offered by banks in Ireland with the current ECB rate.  However, we source a reducing and small portion of our funding from the ECB (as agreed with both the Troika and the Central Bank) and our blended cost of funds is significantly higher than the quoted ECB rate.

In addition, we have to account for the large number of our customers who are not in a position to make their repayments at present.  Unfortunately, this too adds to the costs faced by performing customers.

I hope this letter provides some clarity on our pricing model and the extent to which we are trying to be fair to existing as well as new customers.

I can understand that my explanation will not be of much consolation to your constituent; however, I do hope that you will accept that we will continue to try to drive our funding costs down over time and share the benefits of that with all our borrowers, existing and new.

Kind regards,

Jeremy Masding
Group Chief Executive Officer


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## 1dave123 (5 Sep 2015)

Perm TSB have updated their website with some additional info including a list of valuers. 

"All eligible Variable Rate customers will receive a Mortgage Rate Switch Information Pack from permanent tsb by 18th September, which will contain an application form, valuation voucher, important information, examples and terms and conditions."

https://www.permanenttsb.ie/whatweoffer/mortgages/changes-to-standard-variable-rate-mortgages/


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## tommyryan55 (8 Sep 2015)

Received my letter today, all seems fairly straightforward.


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## Tired Paul (9 Sep 2015)

Got mine today too. Appointment with valuer for this coming Friday.


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## Agent 47 (12 Sep 2015)

Got mine Thursday, valuer organised, hoping to hit at least <60% LTV. Every little helps.


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## guido (30 Sep 2015)

Hi - has anybody had the change processed yet?  Is there a backlog? (only sent my valuation yesterday) - Thanks


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## tommyryan55 (30 Sep 2015)

Sent valuation last Friday (25/09), online banking updated this morning with new rate but monthly payment hasn't changed yet.


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## Doob (30 Sep 2015)

tommyryan55 said:


> Sent valuation last Friday (25/09), online banking updated this morning with new rate but monthly payment hasn't changed yet.


Same here @tommyryan55 - my rate now shows at 3.7% but my monthly payment is the same - thought it would drop after the most recent payment had gone out last week but it hasn't


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## tommyryan55 (7 Oct 2015)

My monthly payment updated over night on open24.


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## TruthOverPC (21 Oct 2015)

I applied for a switch weeks ago but PTSB seem very quick to throw hurdles in my path.  Just wondering if anyone else is experiencing this?
The latest letter tells me that they are unable to process my application as they have not yet received the Architects/Engineers Certificate of Compliance with Planning Permission and Building Regulation. 
Given that the mortgage was taken out around 1998 they have taken their time in looking for this.  In any case, the house is 150 years old and the mortgage was for the purchase of the house and did not cover any improvement costs so I am not sure why we would be expected to have a Certificate of Compliance with Planning Permission unless this is a standard requirement in which case it should be with the title deeds which I presume the PTSB still hold! 
Anyway, it seems to me they are banking on me (and others?) simply giving up at a certain stage...


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## Collywobbles (21 Oct 2015)

Just be wary - the valuation that gets submitted directly to PTSB (with a copy to the owner) covers whether the property is owner occupied or tenanted. there is a potential risk that you might be thrown on to a buy to let rate if you are now letting out a property that you once occupied.


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## Joe90 (12 Nov 2015)

So here we are 4 months after the announced reduction, and no still confirmation from PTSB what the reduce monthly repayment should be.  Sent back the form, received a holding letter 3 weeks ago confirming we were going to be reduced to 4.2%  from 4.5%.  Not a word since on date when the proposed reduction will be effective from, or what the amended monthly mortgage repayment will be.  

They're some shower, too slow even to catch a cold....


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## Agent 47 (12 Nov 2015)

Collywobbles, I hear what you are saying but they cannot change a homeloan into a BTL. Some 2 years back we met with our PTSB manager as were coming off a 10 yr fixed and were fearful that we would be put on 5.7%. We were told that the rate would be Variable homeloan rate as the loan was taken out as a homeloan and we did leave in it as a home.

We got the letter to change to the new rate and they sent it to our PPR, I handed it in complete to PTSB yesterday despite their valuer taking almost 2 months to value and then send us out the wrong addressed valuation and for a Semidetached home as opposed to Detached. I am not finished with that valuer yet, I will be sending in a complaint to the society of valuers and PTSB. So now we wait.


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