People with a Permanent TSB tracker mortgage should suspend voluntary overpayments for a while to await news of a possible sweetener to be introduced by the bank, The Sunday Times’ personal finance editor Niall Brady advises.

“They should also delay moving house because Permanent TSB is considering allowing borrowers to make their trackers portable, although this is likely to come with an increased interest rate,” he writes.

Tracker mortgages are costing the bank €400m a year – contributing to operating losses of €364m last year. They make up more than 60% of the bank’s loan book.

The average rate on a PTSB tracker is 2% but the bank is paying 5% on the money it is borrowing to fund these loans. This means it is desperate to move people off them. Other banks are watching closely as they are caught in a similar situation.

The advantages of overpaying are compelling. For someone with a €300,000 mortgage at a tracker rate of 2% over 30 years, the monthly repayments would be €1,100. Upping that to €1,500 a month would save more than €34,000 interest and the mortgage would be paid off after 20 years, four months.

If PTSB were to sweeten that proposition even further, it could be worth holding off for, Brady says.

Contact Anthony Casey to discuss your mortgage or commercial loan position.

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