Mortgage provider Avant Money has said it will increase its mortgage interest rates from tomorrow, 8 December.

It will raise rates by an average of 0.75% across its mortgage products.

However, the lender said customers with a current offer letter can avail of the existing rates if they draw down their mortgage by 20 January 2023.

This will be the third rate hike from the lender this year, and follows increases in May and August.

Avant Money said the move follows interest rate increases by the European Central Bank and rising funding costs.

"We continue to see interest rates increase and regrettably are passing these onto our customers," said Brian Lande, Head of Mortgages at Avant Money.

From tomorrow, its three-year fixed rate product will start from 3.25% - up 1%. This is for a borrower with a loan to value of 60% or less.

Its four year-fixed rate will start from 3.40%, up from 2.45%. Again, this is for a borrower with a loan to value of 60% or less.

Meanwhile, its five year fixed rate will start from 3.65%, up 1%.

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.

Yesterday, the Governor of the Central Bank said he sees a 50 basis point increase in interest rates as the minimum needed at the ECB's December meeting.

Having raised rates by a combined 200 basis points (bps) since July to fight off record high inflation, the ECB has signalled a slowdown in the pace of monetary tightening this month after back-to-back 75 bps point moves.