Mortgage provider Avant Money said it will increase its mortgage interest rates from Monday August 15 after the recent rate hike from the European Central Bank.

Avant said that market funding costs have risen sharply this year and with one ECB rate change already announced, more are anticipated.

It said today it will increase its three-year fixed rate product by 0.3% so that rates now start from 2.25%.

The mortgage provider's four-year and five-year fixed rate products increase by 0.5%, while its seven-year fixed rate product will go up by 0.7%.

Avant Money also offers longer term fixed rate mortgages with terms fixed up to 30 years. It said the cost of these mortgages will increase by 1%.

In today's statement, Avant said its current fixed rates will be available to customers with a "letter of offer" who complete full mortgage drawdown by close of business on Friday September 9.

"Avant Money has grown substantially this year and remains fully committed to enhancing and extending its proposition as other lenders exit the market," it said in today's statement.

Avant Money is owned by Spanish banking group Bankinter and provides mortgages, personal loans and credit cards under its own brand and through An Post Money, Chill Money and other partners.

Its mortgages are available through certain mortgage brokers and loans are available to first-time buyers, mover and switchers.