AIB and EBS to up variable mortgage rates

Wednesday 24 April 2013 22.19
AIB says variable rates had been at 'unsustainable levels' for several years
AIB says variable rates had been at 'unsustainable levels' for several years

AIB is to increase its variable mortgage rates by up to 0.40%, effective from June 5.

Variable mortgage rates at EBS and Haven, which are owned by AIB, will increase by up to 0.25%, effective from June 1, the bank said in a statement.

The bank said that while it is keeping its lending rates under constant review, based on current funding costs it does not anticipate any further variable mortgage price increases in 2013.

AIB said the decision to raise its variable rates is due to the need of ensuring its lending at long term sustainable pricing levels.

It said that its variable rates have been at unsustainable levels relative to the cost of funding for several years, while EBS has not announced an increase in almost two years.

"AIB is making significant progress in returning to a stable banking model and must apply competitive pricing policies in order to make a return to profitability,'' commented the bank's director of products, Fergus Murphy.

''While AIB and EBS recognise that any increases are unwelcome for customers, we must ensure that mortgages are provided at a sustainable pricing level,'' he added.

It said that its variable rates have been at unsustainable levels relative to the cost of funding for several years, while EBS has not announced an increase in almost two years.

"AIB is making significant progress in returning to a stable banking model and must apply competitive pricing policies in order to make a return to profitability,'' commented the bank's director of products, Fergus Murphy.

''While AIB and EBS recognise that any increases are unwelcome for customers, we must ensure that mortgages are provided at a sustainable pricing level,'' he added.