57,000 mortgage customers of Permanent TSB who are still paying the standard variable rate (SVR) of 4.5% should immediately avail of savings that are available by switching to the bank’s Managed Variable Rate (MVR) product, according to Fianna Fáil Spokesperson on Finance Michael McGrath.

Deputy McGrath was commenting on the occasion of the appearance of Permanent TSB CEO Jeremy Masding and other bank senior management before the Joint Oireachtas Finance Committee this morning.

“Permanent TSB’s SVR of 4.5% for existing customers is ridiculously high and is in stark contrast to the bank’s blended cost of funds of just 0.46%. In 2015, the bank introduced new MVR mortgage pricing and this allows their existing customers to avail of rates of between 3.7% and 4.3% depending on their Loan to Value (LTV) ratio. While 43,000 customers previously on the SVR have moved across to the MVR, some 57,000 customers unnecessarily continue to pay the 4.5% rate.

“There is no cost for the mortgage holder in moving across to the MVR (the bank will pay for the valuation of the home to be done) and there is a certain gain. The gain will be a reduction in the interest rate on the customer’s mortgage of between 0.2% and 0.8%. For example, a reduction of 0.5% in the interest rate paid on a mortgage of €200,000 results in a saving in interest of €1,000 per annum. While some customers would be best advised to shop around and avail of better rates in other banks, there is no reason why all customers can’t avail of the MVR.

“Separately, I welcome the commitment given by the Bank’s CEO today in response to my questioning that the fixed interest rate offers available for existing customers are being reviewed. This is an urgent issue given the manner in which the bank’s existing mortgage customers are being discriminated against.

“This discrimination means that a new customer can avail of a fixed rate of around 3% whereas the lowest fixed rate available for existing customers is 4.2%.This is a significant and unjustifiable differential. The bank’s review needs to be completed quickly and should be followed by significant fixed rate reductions for existing customers,” concluded McGrath.