Permanent TSB is to increase its interest rates for new fixed rate mortgages by a further 0.75% from tomorrow.
Variable mortgage rates are to remain unchanged as are existing fixed rates, but variable rates for secured and unsecured business term loans for existing and new business customers are also to climb by 1%.
However, in a boost for savers, certain deposit rates are also to rise by up to 0.5% from March 14.
PTSB said any customers who have received an offer letter that is based on the existing fixed rates it is currently offering will have until June 2 to complete the drawdown of the loan at that pricing level, or prior to the current loan offer expiry date, whichever is soonest.
It is the third time that the bank has increased its cost of borrowing for home purchases since the European Central Bank began increasing rates in July of last year and the largest single rise.
In January, it increased fixed rates by an average of 0.51% and in November it implemented its first hike, which averaged out at 0.45%.
The ECB has increased its rates five times since last summer adding 3% in total so far, with a further 0.5% expected next week.
While the main banks here have so far been relatively slow to pass on interest rate increases to mortgage customers compared to European peers, the pace has increased in recent months.
However, the lenders have been even slower to increase deposit rates and so are coming under gathering pressure to increase what they pay to savers.
PTSB said the rate of interest it pays for Online Regular Saver Account amounts of up to €50,000 will increase by 0.35% to 0.75%, as will the rate on 21-Day Regular Saver Account balances.
While the rates paid on fixed term deposits from 6 months to 5 years will increase by between 0.20% and 0.50%.
The latest move means many of PTSB's fixed mortgage rates for a standard first-time buyer will now be over 4.50%.
Darragh Cassidy from switching website, Bonkers.ie, said the news was expected.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
"However, even after this latest increase from PTSB, its third since November, it's only passed on just over half the recent ECB rate increases," he said.
"But this 'generosity’ has largely come at the expense of savers who are still getting some of the worst savings rates in all of Europe."
"PTSB, along with AIB and BOI will all come under big pressure in the weeks ahead to significantly improve their savings rates."
He added that up until the middle of last year, it was possible to get a mortgage rate as low as 1.90% in Ireland.
But by the end of the year, the cheapest rate is likely to be over 5%, with the average rate even higher, he said.
