Permanent TSB is set to introduce a new pricing model for mortgages this week, which would mean lower rates for some new customers.
However, those with deposits of 10% or less will pay more under the new system.
The bank is understood to have briefed senior staff on the plans to overhaul its mortgage offering late last week. From Wednesday, five new variable rate mortgage products will be on offer for new customers, based on the size of a customer’s deposit relative to the amount they want to borrow, with lower rates available for those with a bigger deposit.
Four of the five new rates will be lower than the bank’s current standard variable rate of 4.34%, with the new rates starting from 3.95% for those borrowing less than half the value of a property.
However, those who only have a deposit of 10% of the purchase price – typically first-time buyers – will pay more under the new system.
For those customers, the mortgage rate on offer will increase from Permanent TSB’s current standard variable rate of 4.34% to a new rate of 4.45%.
The new lending rates will be available for first-time buyers, switchers and people moving house and would replace the current standard variable rate for new customers.
Ger Mitchell, the bank’s director of lending, told The Sunday Business Post that the new pricing model was “much more sophisticated” and would allow the bank to “reward new customers who have a lower risk profile.”