Ger Mitchell, the Director of Lending at the bank has announced that the bank will charge new customers different variable rates depending on the size of the mortgage relative to the value of the property.
For purchasers borrowing less than 50pc of the value of the property, the new variable rate will fall to 3.95pc (a reduction of 0.39pc from the current SVR of 4.34pc).
For those borrowing at higher LTVs (Loan To Value) ratios, the variable rate will increase through various stages so that an LTV of 70pc will attract a variable rate of 4.15pc while a 90pc LTV will have an interest rate of 4.45pc.
Ger Mitchell has confirmed that the new rates will be available to "switchers (people moving their mortgage from their current bank but not selling their home) as well as First Time buyers and those simply selling their home and buying a new one.
The new rate model will replace the use of the Standard Variable Rate (SVR) for new customers. That rate today stands at 4.34pc. (This rate is typically discounted for new business for a period of 12 months before reverting to the SVR for the remainder of the mortgage).
"This is a much more sophisticated pricing model for mortgages which will allow us to reward customers who have a lower risk profile while charging a higher rate from customers who represent a higher risk by virtue of the amount of money they are borrowing relative to the value of the property," said Ger Mitchell.
"The move will see permanent tsb bank take a leadership position in the market in key market segments; the bank will provide lowest rates in four of the five categories."