Thursday September 15th 2005
BROKER Simply Mortgages has denied claims that low rates on its new personal loans may be fleeting.
The broker is providing loans supplied by lender Permanent tsb at better rates than PTSB gives its own customers.
On a typical €10k borrowed over five years, Simply Mortgages cuts a full percentage point off PTSB's 8.9pc rate, to give a standard variable rate of 7.9pc.
Of course, National Irish Bank's new rate cut to the lowest known rate of 7.5pc on the same loans makes the Simply Mortgages-PTSB debate academic.
The substantial cut from NIB's old rate of 8.1pc is, a NIB spokesman said, a small indication of the kind of cuts the bank will make in the next six months.
Undercutting competitors is, he explained, "the only way NIB will grow market share."
David Crimmins, marketing manager with Simply Mortgages, rebuffed PTSB's claim that the broker's rate was merely "a loss leader" while it was "trying to establish [itself] as a provider or products other than mortgages."
Mr Crimmins countered, "the Simply Mortgages rate is not a tactical loss leader. The only reason we would move it up is if the ECB rate goes up".
Since the rate is not a tracker, which must be priced in line with European Central Bank movements, there would be no legal impediment to Simply Mortgages changing it at will.
But Mr Crimmins stressed: "We have no plans to change it."
Contrary to its name, Simply Mortgages has just broadened into providing personal loans, having previously extended its role from being a broker of mortgages to one selling home and travel insurance, and now term loans.
In other areas, such as home insurance, Simply Mortgages has undercut the provider so that it and not the insurer makes the ranks of those listed in our Good Buys table.