Mortgage rate hikes on the way

Significant inter-bank borrowing costs mean that Permanent TSB’s decision to raise its SVR mortgage rates is likely to be copied soon by the other financial institutions, writes David Clerkin, Markets Correspondent

30th January, 2010

Permanent TSB’s increase in the cost of its standard variable rate (SVR) mortgages arises from problems it shares with its competitors: it pays too much to get its hands on money and -despite what its borrowers may think -does not charge enough for its loans.

The bank’s problems stem from the fact that its €40 billion homeloan book grew too quickly during the property bubble, far outpacing the bank’s ability to grow its...

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