First Active and Ulster Bank have become the first lenders not to pass on yesterday's 0.75 points European Central Bank interest rate cut in full to customers.
Instead the pair, both owned by the Royal Bank of Scotland, will cut rates by 0.5 points from January 1.
Statements released by the banks this afternoon explained their decision was based on 'the increased cost of money being experienced throughout the banking sector'.
Earlier, more banks said they would pass on the full ECB rate cut to mortgage holders.
Permanent TSB, EBS, Irish Nationwide and National Irish Bank all said today that they would pass on the cut to those on variable rate mortgages. And KBC Homeloans has confirmed this evening they will be passing on the cut in full.
But Permanent TSB has warned that high inter-bank interest rates mean that future reductions may not be passed on in full. The bank says the cost of funding on money markets remains significantly higher than the ECB base rate.
AIB, Halifax Bank of Scotland, Bank of Ireland and its subsidiary ICS had already said they would pass on the ECB cut in full.
The ECB yesterday cut its main rate by a record 0.75 points to 2.5%.
