New low rate PTSB mortgage available only to new customers
Permanent TSB has launched a new low mortgage rate aimed at attracting customers looking for an alternative option to cash back on direct debit.
However, the product is only available to new customers of the bank, which may offend existing customers as it is a form of dual pricing.
The bank’s new rate of 2.25%, fixed for four years, is available to all new home loan clients, including first-time home buyers, people moving, and clients looking to switch mortgage providers. mortgage. It is not available for rental customers.
The lowest rate is available for those with a loan-to-value rate of less than 80 percent, with a higher rate of 2.55 percent available for those with mortgages worth between 80 and 90 percent of the price home purchase. The launch of the product marks a slight change of course for the bank. Previously, it used cash back offers to entice new buyers and money changers. But now he’s looking to compete on rates, although customers will also be able to take advantage of the bank’s repayment offer.
This gives 2 percent return on the value of the mortgage at the time of the drawdown, but a borrower receiving this incentive will not qualify for the lower rate. Instead, they can choose from options like a three-year fixed 2.5 percent product.
Customers who opt for the lower rate can also benefit from the 2% discount on the value of their monthly mortgage payments if they have a checking account with the bank.
Cash back offers have been criticized by the Competition and Consumer Protection Commission as offering low value to borrowers because the rates associated with these products mean homeowners end up paying more for their mortgage. As such, the bank’s decision to compete on rates, rather than a repayment offer, will be welcome.
However, its decision to only offer the product to new customers may well upset existing borrowers. According to the bank, rates for existing customers start at 2.95 percent, which is a significant deviation from the new rate of 2.25 percent. While some of these customers may have enjoyed cash back rewards in the past, the same is not true of older customers.
While insurance companies come under scrutiny by the government and the central bank due to the practice of dual pricing, where different customers are charged different prices for the same product, banks did not focus on this point. This despite the practice of offering cash back rewards – or now lower rates – to new customers only.
Laura Temple, head of loan products at the bank, said the introduction of the new option was intended to “expand the choice available to customers.”
“Our cash back mortgage offering is extremely popular with customers, but some would prefer a lower rate option with no cash back and this product is designed for them,” she said.