ONE OF THE COUNTRY’S largest mortgage lenders is to cut between 250 and 350 jobs – just as it prepares to announce a massive increase to its mortgage interest rate.

Permanent TSB is to shed at least 250, and possibly 350, jobs from its workforce of about 1,900 – after reports emerged that the lender was about to raise its standard domestic mortgage rates by 1 per cent.

RTÉ News reports that the lender is likely to tell an internal meeting this afternoon that full plans for job losses will be announced later in the week.

Managers will be given an initial briefing about the plans at a meeting in a Dublin hotel this afternoon, it added.

The job losses come as consultants Accenture complete an intensive audit of the company’s finances, and on the bank of a €131m loss in the first six months of 2010.

The proposed 1 per cent hike in interest rates could cost the average home about €2,000 a year.

Those rates could be raised further in coming months, with the European Central Bank considering an increase to its own key interest rate as inflation increases in the Eurozone nations.

Shares in Irish Life & Permanent PLC were unchanged on the Irish Stock Exchange this lunchtime.