A bank has defended its policy of charging mortgage holders an extra day's interest due to the Leap Year after irate mortgage holders bombarded a radio talk-show with complaints about the practice.

Although many financial institutions charged interest for February 29th, only IIB Homeloans wrote to customers pointing this out.

As a result, infuriated mortgage holders vented their ire on RTÉ Radio's Liveline.

IIB moved quickly to defend its stance, issuing a statement which pointed out it was not alone in levying interest by the day.

AIB and Bank of Ireland later confirmed that they had charged interest for February 29th. The average daily interest on a €250,000 standard rate mortgage is around €20.

The Consumers' Association said IIB's determination to keep customers informed had landed it in trouble.

"They seem to be a victim of their own good intentions," said Mr Dermott Jewell, chief executive of the association.

The episode showed consumers should study the small print of their homeloans he said.

Other banks appeared incredulous that customers felt they had been short-changed.

"It cuts both ways. Deposit accounts earn extra interest due to the additional day," said a Bank of Ireland spokeswoman.

"The Leap Year is a commercial reality. You wouldn't expect the ESB to give you free electricity for 24 hours just because the year is a day longer."

Ulster Bank and EBS said the Leap Year was irrelevant to their customers as interest is calculated on the basis of the balance outstanding.