Permanent TSB Bank has announced that it will cut its standard variable interest rates.
The bank said this will allow over 70,000 existing homeloan customers on mortgage rates of 4.5% to move to new rates starting from 3.7%.
A statement from the bank said the new rates will vary depending on the amount owed by customers and the current value of their home.
This is a move away from the traditional way of charging for standard variable rate homeloans.
"The move will mean an end to the traditional SVR mortgage for homeloan customers that was based on a one-size-fits-all approach where one variable interest rate applied to customers irrespective of how much equity they had in the property," Permanent TSB said.
The bank said that customers can start the switch process in August and the new rate will be available from September.
Customers will need to apply to the bank to move to the new rates and PTSB will pay for a valuation of their home to support their application.
In the coming weeks, the bank said it would write to over 70,000 customers on variable rates to advise them of the new policy.
It said, however, that the new product is available to homeloan customers only and it not available for buy-to-let customers.
"This is the biggest innovation we've undertaken in mortgage pricing for existing customers ever. It marks a fundamental shift in the way we treat our existing customers and will allow us to offer existing customers some of the most competitive mortgage rates in the Irish market," commented Permanent TSB's director of lending, Ger Mitchell.
The Finance Minister Michael Noonan had set a deadline of today for banks to respond to his demands for rate cuts.
