Permanent TSB is to entice new mortgage customers with an offer to pay €1,000 toward their legal fees.

The incentive, which is open customers switching from other banks, is designed to match similar offers by rival lenders.

It was announced on the same day as Permanent TSB reduced its key managed variable and fixed mortage rates - a move signalled in advance.

Mortgage providers have been under pressure to follow AIB’s surprise move in December to cut variable and fixed mortgage rates, its first such reduction in over three years.

Permanent TSB's Richard Kelly that the new €1,000 legal fee offering will mean borrowers are not distracted by incentive offers put up by other banks.

“Some banks are trying to distract borrowers with incentives which take attention away from their underlying rates. We’ve some of the most competitive rates on the market and this move will ensure that customers will not be distracted by headline incentive offers from other banks.”

Mr Kelly confirmed that the incentive will be available to new customers who are fully mortgage approved before the end of March - or to those to whom a full letter of approval has been issued to the customer’s solicitor.

To qualify for the incentive, at least one of the parties to the loan must have or must open a Permanent TSB current account from which monthly mortgage repayments will be made.

The €1,000 offer is available to first-time buyers, second-time buyers and switch customers.

Under the rules of the offer, the applicant must also have paid at least €1,500 into the account no later than five weeks from the date of the issue of the loan cheque.

“All new current account customers can avoid paying senseless fees. Not only that but we’re the only Irish bank where a customer does not need to maintain a minimum balance. You simply have to lodge €1,500 per month. A €12 quarterly fee applies if you don’t lodge €1,500 every month. Other transaction charges may apply e.g. unpaid items, “ Mr Kelly said.