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Mortgages

New Permanent TSB chief executive promises to review mortgage rates

The lender had been criticised for keeping its variable mortgage rates higher than other state-owned mortgage lenders.

THE NEW CHIEF EXECUTIVE of one of the country’s biggest mortgage lenders has confirmed that the lender will review the interest rates on its mortgages, after criticism that its rates were higher than those of other State-owned institutions.

Jeremy Masding, the chief executive of Permanent TSB, has told Fine Gael backbench TD Simon Harris that the institution is reviewing its lending rates after coming under public scrutiny.

The bank currently levies an interest rate of 5.19 per cent on mortgages, compared to other nationalised institutions which charge much lower rates. AIB’s variable interest rate on home loans is 3 per cent; Bank of Ireland’s is 3.5 per cent and Ulster Bank’s is 4.9 per cent.

The matter had been raised in written parliamentary questions to Michael Noonan by a number of TDs from across the Dáil, but the minister had said the nationalised institutions were being managed on an ‘arm’s-length’ basis.

Now, however, Wicklow TD Harris says he has secured a commitment from Masding that the bank will review “all aspects of its lending rates, including the current Standard Variable Rate charged on mortgages”.

“While I understand that the bank must be run as a commercial entity, it is very difficult to countenance the bank’s current position on interest rates when it has received so much financial support from the taxpayer,” Harris said.

He added that he understood the review of the interest rates would be completed by the end of the month.

Permanent TSB, which forms part of Irish Life & Permanent which is wholly-owned by the State, had previously offered a rate of 5.69 per cent but had reduced its variable rates in line with the 0.5 per cent cut to the ECB’s main interest rate in late 2011.

Read: Permanent TSB reports losses of €424million

More: Some mortgage holders ‘choosing not to pay’, broker says

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