ICS Mortgages is set to increase its variable interest rates across its owner occupier and buy to let products, effective from October 1, 2022.

The lender said the changes will not impact on the fixed rates of existing customers or customers with a valid fixed rate loan offer.

ICS said owner occupier variable rates will increase across all Loan to Value (LTV) bands by 1.25%. For example, the rate on an owner occupier variable rate mortgage with an LTV of less than 70% will increase from 2.45% to 3.7%.

It said Buy to Let variable rates will increase across LTV bands by 0.5%. For example, the rate on a Buy to Let variable rate mortgage (capital and interest) with an LTV of less 60% will increase from 3.75% to 4.25%.

Ray McMahon, Chief Commercial Officer, ICS Mortgages said, "Lenders continue to experience significant increases in the cost of funding resulting from ongoing volatility in the international capital markets. Like all prudent mortgage lenders, ICS Mortgages must ensure that our mortgage products are funded in a stable manner, which takes account of the evolving interest rate environment.

"ICS Mortgages remains committed to offering competitive mortgage interest rates. With these rate changes we continue to offer attractive variable rates for both owner occupier and buy to let mortgage holders. We will continue to review our position on variable interest rates on an ongoing basis. Our fixed rates remain unchanged."

Mr McMahon said all existing variable rate customers will be contacted to outline the effect of these changes on their ICS Mortgages product.

Two weeks ago, ICS Mortgages announced that it will cap the size of new home loans at two and a half times income.

Speaking at the time, Michael Dowling, managing director of Dowling Financial, said he was confident that the decision would not set a trend that other financial institutions would follow.