Bank of Ireland raises rates by 0.25% for new fixed rate mortgages

Bank of Ireland said today it has increased fixed rates for new mortgages by 0.25% after the recent interest rate increases by the European Central Bank.

Bank of Ireland said the new fixed rates are effective immediately, and apply to customers who draw down new mortgages from the bank.

But it said that new customers who already have a written quote from the bank for a lower fixed rate, and who draw down a new mortgage by December 9, can avail of the lower rate up to that date.

Bank of Ireland said its variable and tracker rates are not affected by this change.

The lender also said there is no change to the rates available for its existing mortgage customers.

It said that existing fixed rate mortgage customers who may be coming to the end of their current fixed rate period and are considering re-fixing can still avail of these unchanged fixed rates.

Existing variable or tracker customers who choose to opt for a fixed rate can also still avail of these unchanged fixed rates, it added.

AIB was the first of the main banks to increase the interest rate it charges for new fixed rate mortgages, when it raised them by 0.5% last month.

The new rates applied to AIB, EBS and Haven mortgages.

The ECB has signalled that it will continue to raise rates over the coming months.

It is likely to raise rates by 0.50 of a percentage point to 2.5% when it next meets on December 15 and rates will likely reach 3% in early 2023.

In a statement today, Bank of Ireland said that as is the case with all rate matters, its approach will continue to be kept under review.

"Any change in the future will be clearly communicated at that time," it added.

Figures from the Central Bank earlier this week showed that rates for new mortgages in Ireland fell slightly in September.

The average rates on new mortgage agreements in September was 2.58%, down six basis points or 0.06%, on August. This is down 14 basis points or 0.14% on September of last year.

The average for new fixed rate mortgages was 2.46%, down three basis points or 0.03% compared to August and down 14 basis points or 0.14% on September last year.

The Central Bank figures showed that Irish mortgage rates are now no longer the most expensive in the euro area but are still just above the euro area average.

The euro area average rate for new mortgages was 2.4% in September.