Permanent TSB is set to announce details of a new mortgage product that will offer 2% cash back for new home loan customers on both fixed and variable rates.

On Monday the bank will launch a product initiative called the '3 in 1 Mortgage', which will form the key element of its mortgage campaign for the coming year.

Both first-time buyers and customers who are switching financial institution will be able to avail of the offer.

On a mortgage of €300,000 this will mean €6,000 back to the customer, with buyers receiving the money within ten days of drawdown.

In addition, the bank will reduce its variable rate for new buyers and switchers by 0.5% for a year.

The offer will be available for mortgages approved before 30 June, including those who have received a full Letter of Approval before 11 January 2016 but who have not drawn down their mortgage by that time. 

The move follows a similar 2% cashback offer from Bank of Ireland for mortgage customers.

As part of the initiative, PTSB will also be giving customers flexible payment options including payment holidays, and an overpayment option.

The bank will be undertaking a significant advertising and promotion drive to promote this new campaign.

A source within PTSB told RTÉ News that "the 2% cash back is really important and the research we've done suggests that customers are really interested in it.

"The bank has made huge progress on dealing with various legacy issues and last year it very successfully brought in new international investors.

"This move demonstrates that this year we're going to compete really strongly in the mortgage market and grow our market share," the source added.