PERMANENT TSB HAS announced a new mortgage deal for those in negative equity which will allow them to trade up or down from their current homes.
The initiative will also enable customers with tracker interest rate mortgages to move home without losing the much-coveted product. However, they will have to pay a small premium.
According to the lender, many homeowners are excluded from the market because they do not want to relinquish a tracker interest rate mortgage. Until now, anyone wanting to sell their house to buy a new one, had to take up an entirely new mortgage at market rates.
Those in negative equity are also excluded because they cannot finance the negative equity part of their mortgage to buy a new family home.
Under the plan, mortgage holders can sell their existing home and buy a new house by transferring the negative equity on the former property to their new home.
Limits will apply to the amount that customers who are in negative equity may borrow in the event of trading down or trading up (175% and 125% respectively of the value of their new family home).
Permanent TSB said that customers can start making inquiries about its new products, which have been described as ‘breakthroughs’, from early May.
For those with tracker mortgages, the new tracker interest rate (the old one plus 1 per cent) will continue for the full term outstanding on their current tracker mortgage.
If the first mortgage amount does not cover the full purchase price of the new property, new mortgage business rates will apply to any additional borrowings.
CEO Jeremy Masding claimed the initiative reflects PTSB’s “determination to find solutions that can help the market function better and that are fair to both customer and bank”.
While other banks have similar deals in place, PTSB says its one is the first that covers the whole mortgage term.
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