Ulster Bank has become the second financial institution today to announce an increase in mortgage interest rates.
The bank plans to raise its standard variable mortgage rate by half a percentage point to 4.35% from March 1. This will add about €27 a month to the repayments on a 20-year €100,000 mortgage.
Earlier, Permanent TSB confirmed that it will raise its standard variable mortgage rate and other variable mortgage rates by one percentage point. The standard variable mortgage rate will increase to 5.19%.
The increase will affect mortgage repayments from March 7. Permanent TSB says the impact of the rise on its average standard variable mortgage rate will be about €33 a month.
The bank also said it does not intend to make any further increases this year outside of any increase in ECB rates. This is the fourth rate increase announced by Permanent TSB since August 2009 and is also the largest increase in one go. PTSB has also confirmed it will no longer offer fixed rate mortgages.
Permanent TSB also confirmed that it would cut 280 jobs through a voluntary redundancy programme over the coming months.
In a statement, the bank said that another 100 people would be redeployed from their current positions in branches or head office to work in new positions in the bank's online and telephone banking operations. Permanent TSB said that no branches would close as a direct result of the job cuts.
The bank employs 1,850 people and has 100 branches nationwide. It has already cut 400 jobs in the last two years.
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Permanent TSB's chief executive David Guinane said that the two moves were a major part of the bank's plans to return the bank to profitability by reconfiguring its operations in light of higher costs and reduced business volumes.
'We have set out a roadmap for the recovery of the bank and while that impacts on both customers and staff, it is key to the ultimate recovery and success of the bank,' he said.
'We're entering a new period for banking in Ireland and we have to ensure that Permanent TSB bank is correctly sized and has the correct margins for the market conditions we are operating in at present,' he added.
