Permanent TSB rates increase from today

Permanent TSB confirmed on Friday that it is raising the interest rates on its standard variable mortgages and related products to 3.69pc from 1 February.

High cost of funds
According to the bank, the decision to increase rates had been forced on it as a result of the continuing high cost of funds.

“While the bank sources funds from a variety of sources, the overall cost of funds continues to be substantially higher than the official ECB interest rate.  For example, Permanent TSB is currently paying up to 3.35pc for retail deposit funds.  This is higher than the bank’s standard variable rate mortgage of 3.19pc,” the bank said.

“Clearly it’s not sustainable for the bank to be paying more for the raw material [money] than it can charge for the finished product [mortgage],” it added.

Face up to financial challenges
Commenting on the rate rise, the Chief Executive of Permanent TSB David Guinane said the bank would work “closely and sympathetically” with any customer who has financial difficulties , but said the bank must also face up to its own financial challenges.

“To persist with uneconomic margins on this product at a time when the bank is losing money would be irresponsible and would result in larger problems down the line,” he said.