EBS has paid refunds totaling nearly €1.5m to 400 customers after it discovered it had failed to give them sufficient information around changes they were making to their mortgage.

The lender, which is part of AIB, discovered the problem following an internal review of some customers who had been on a reduced variable rate between May 2009 and January of last year.

It found that before choosing to fix the rate on their mortgage, some of the borrowers were not advised that they could not revert to a reduced variable rate when the fixed period came to an end.

"In February, we apologised to affected customers, corrected the issue and issued them with refunds," EBS said in a statement.

The average refund given to each one of the 400 customers impacted was €3,700.

If they wanted to, the borrowers concerned were also given the option of returning to the reduced variable rate, which technically they were not entitled to do.

A spokesperson for the bank said some opted to return to the variable rate, while others stuck with the fixed option they were on.

He added that the bank has since made it clearer in its communications that if a customer comes off a reduced variable rate to a fixed one, they cannot return to the original rate.

The issue was not in any way related to tracker mortgages, the spokesperson said.

Last month it emerged that tracker mortgage borrowers at EBS and another AIB subsidiary Haven were to receive €6,000 each on average as they had been charged the wrong rate of interest over the past 14 years.

Three months ago EBS also had to apologise to 16,000 mortgage customers for mistakenly telling the Irish Credit Bureau that they had missed repayments.