70,000 AIB customers face their second rise in interest rates in three months.
The bank announced late last night that it was increasing the interest charged on its variable mortgages up to 4% from 3.5% in November; its second variable rates hike in three months.
The latest move to put mortgage interest rates up at AIB will affect one in five mortgage customers at the bank.
This will mean another €30 being added to the monthly repayments for every €100,000 borrowed.
The bank said that it was putting the rates up as its mortgage book is loss-making, and it needs to return to sustainability. AIB is nearly wholly owned by the State having received funds to date amounting to €21 billion.
Almost one in ten holders of the bank's residential mortgages is three months or more behind in their payments.
AIB chief executive David Duffy said the bank is "acutely" aware of the financial impact that any increase will have on its customers, but that the move is needed to transform its operating base.
Last month Bank of Ireland and ICS customers were told their variable rate mortgages would also increase by a 0.5% from October 24.