Bank of Ireland UK subsidiary raises rates

HIGH FUNDING costs have forced Bristol West, Bank of Ireland’s UK subsidiary, to raise rates across its mortgage range.

Bristol West, which accounted for two-thirds of Bank of Ireland’s £27 billion (€34 billion) UK mortgage book at the end of March, is increasing its rates by an average of 0.25 of a percentage point from today, though one of its fixed-term mortgages is increasing by 0.76 of a percentage point.

Buy-to-let mortgages are rising by up to 0.4 points, while self-cert mortgages, so-called “liar loans” where self-employed customers verify their income, are increasing by up to 0.64 of a percentage point.

“This change is reflecting the cost of funding,” said Mark Howell, head of marketing at Bristol West. “We saw the rise in swap rates last week and this is reflecting those changes.”

The rates at which British banks lend to each other edged lower, though they remain very high.

The three-month sterling Libor rate fell 0.01 per cent to 5.95 per cent as comments by Bank of England governor Mervyn King dampened expectations for interest rate hikes later in the year.