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TSB paves the way for €350m loan bonanza

IRISH-based lenders are expected to follow Permanent TSB's lead to make additional mortgage funds available for home-buyers.

The bailed-out bank revealed that it would make up to €350m available for new mortgages -- which equates to about 2,000 house sales.

The bank now has €350m to lend for new mortgages alone.

Permanent TSB unveiled a raft of changes to its lending targets for this year.

Personal lending targets at the bank are due to be increased fivefold in 2013 to €450m -- up from €90m last year.

In addition to home loans, the bank pledged to provide €100m for car and other personal loans as well as €5m for new credit card finance.

Figures from the Irish Banking Federation outlined that less than 10,000 mortgage loans were issued in the first nine months of last year across the country.

Analysts said that this latest announcement is likely to spur other banks and building societies to provide money to lend for home purchases.

New customers will be able to avail of the home loan at an attractive 3.99pc rate which rises to 4.33pc after one year.







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A deposit worth at least 10pc of the value of the property will be required. The decision is a marked departure for the lender -- Permanent TSB issued virtually no new mortgages last year.

And homeowners will be keeping an eye on the re-entry of Permanent TSB into the market and how other banks will follow suit to see if it identifies a rejuvenation of the property market.

Group chief executive of Permanent TSB Jeremy Masding said the bank's ability to finance new lending came from €12bn that customers have on deposit. Other lenders are also recording positive turnaround in their mortgage books.

AIB recently said that it is currently approving seven out of every 10 mortgage applications and sanctioned 5,922 mortgages up until September 2012 --a 90c jump on the same period last year.

Head of mortgages at AIB, Jim O'Keeffe said: "There is clear momentum in our mortgage business with significant gains year on year."

AIB and Bank of Ireland are the main banks lending to first-time buyers on a significant level. KBC Bank requires a deposit of 20pc of the value of the property.

clairemurphy@herald.ie