PTSB is to offer hundreds of its customers low tracker mortgage rates on the expiry of a fixed-rate period.
Around 800 customers are affected by what is the latest development in the long-running tracker overcharging scandal.
It is now 17 years since the Irish Independent first exposed how banks and other lenders had denied mortgage holders good-value trackers, or when they did give them back, the interest rates were so high they were not regarded as being trackers.
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Across 11 lenders, more than 42,000 mortgage accounts have been identified as having been affected by the tracker mortgage scandal, the largest overcharging controversy in Irish history.
A tracker mortgage is one where the interest rate moves in line with European Central Bank (ECB) refinancing rate plus a fixed margin set by the lender. This margin is usually 1pc to 1.5pc.
Letters are due to go out from today to a group of PTSB mortgage customers who originally had a condition that the bank had to offer the “tracker mortgage rate appropriate to the balance outstanding” on expiry of a fixed-rate period.
The mortgages affected are those where there was an “enduring contractual right” to move back to a tracker rate after opting for a fixed rate for a period.
Up to now, the residential borrowers were put back to tracker rates with margins as high as ECB plus 3.25pc on the initial expiry of their first fixed-rate term around 2010.
This means they would currently be paying up to 5.65pc if still on that tracker rate.
Now PTSB is to lower the margin to 1pc. This means their current rate will be 3.4pc.
However, account holders must be on a fixed rate currently or move their mortgage account to a fixed rate to be offered this on expiry of the fixed term.
The difference in monthly payments for a €150,000 mortgage could be close to €200 a month.
Broker Padraic Kissane welcomed the decision by PTSB to offer the cohort of customers the option of a tracker rate at a 1pc margin.
“This is good news for this cohort of customers, many of whom may have felt wronged with the margin offered originally on the expiry of their initial fixed rate which was with margins as high as ECB-plus-3.25pc applied to their accounts back in 2010.
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“Many of those customers opted for further fixed rates to lower costs and if those customers are still with PTSB they will be offered the option of a tracker rate of ECB-plus-1pc on the expiry of their current fixed rate.”
Mr Kissane said those on the current tracker rate of ECB-plus-3.25pc should switch immediately to the shortest fixed-rate period (two years) available with PTSB, and at the end of that fixed term, the bank will offer ECB-plus-1pc as an interest rate option.
PTSB said: “In the context of overarching interest rate market conditions, PTSB is reducing the appropriate tracker-rate margin for customers with an enduring contractual right to switch to an appropriate tracker rate at the end of a fixed‑rate period.
“This will be applied on a go-forward basis and the rate for these customers has been reduced to ECB plus 1.00pc.”