Bank of Ireland has raised its standard variable mortgage rate by 0.45 points. Today's development brings the bank's standard variable rate up to 3.49%.
The bank also said that fixed rates for new owner occupier customers will rise by 0.25 points. The new increases come into effect next Tuesday, August 10.
The bank confirmed today that it has no plans for further increases this year, unless the European Central Bank increases euro zone rates.
The bank's ICS Building Society also announced today that it will increase its standard variable mortgage rate by 0.6 points. It said it has no plans for further increases in 2010.
Today's move by Bank of Ireland will increase its standard variable mortgages for 44,000 customers. Borrowers who are affected generally have smaller, older mortgages.
The bank says the average homeloan to be affected is €80,000 in size and the average increase in repayment will be €14 per month.
Explaining the bank's move, its director of consumer lending said that the bank is currently paying more to customers for deposits than it is receiving for mortgages.
'As a result of this, our current mortgage pricing is unsustainable. While any increase is regrettable, we have no choice but to make this move to ensure we remain open for business and continued to support our customers and the Irish economy going forward,' Brendan Nevin said.
