Bank of Ireland has announced a range of interest rate increases which will see many of its mortgage and credit card customers as well as those with overdraft facilities paying half a per cent more for their loans.

The move, which will add close to €100 on to the monthly payments of someone with a mortgage of €300,000, was well flagged by the bank's chief executive Richie Boucher earlier this week.

Speaking after the publication of an interim statement on the bank's results for the first half of this year, Mr Boucher said the bank had tried to absorb the two recent interest rate increases by the European Central Bank but warned that it could not avoid increasing borrowing costs to cover the high cost of deposits.

For every €100,000 owed, a 0.5 per cent increase adds €31 to monthly repayments. On a €300,000 mortgage, the increase will mean an additional €93 per month or €1,116 annually.

The bank is increasing the interest rate on Standard Variable Rate (SVR) mortgages by 0.5 per cent. It is increasing the purchase interest rate on personal credit cards by the same amount while the interest rates for personal variable rate loans are going up by 0.25 per cent.

Changes to interest rates applied to personal and business overdrafts, personal current accounts and business loans will also come into effect from the end of August, the bank said.

In a statement released this afternoon the bank said it had been "a difficult decision and one we have considered very carefully".

The bank has it has been over 12 months since it last increased variable rates. "We have delayed passing on both the April and July ECB rate increases up to this point. However, the price at which we provide lending facilities must reflect the cost of funding those facilities and we have no option other than to increase our rates to reflect the two ECB rate increases.”