Bank of Ireland (BoI) is to raise the interest rate on its standard variable mortgage by 0.45 per cent, it has announced.
The changes will affect about 44,000 of the bank’s residential mortgage customers. Bank of Ireland said the hike was necessary as current mortgage pricing had become “unsustainable”.
The bank said today it doesn't expect to increase its variable home loan rate further this year. "At this point, we do not envisage further mortgage rate increases in the current year outside of European Central Bank moves," spokesman Brendan Nevin said in the statement.
ICS Building Society, owned by BoI, confirmed a mortgage rate rise of 0.6 per cent and said it has no plans for further increases in 2010.
On July 23rd, Permanent TSB raised its interest rates after announcing it is to increase its standard variable rate by 0.5 per cent to 4.19 per cent.
Approximately 80,000 customers – 38 per cent of the lenders’ residential mortgage holders – will be affected by the rate hike, which takes effect from today.
Earlier this month, the Government approved new measures to help those struggling to pay their mortgages. A new five-step system allowing homeowners with arrears to agree new repayment terms with banks and building societies is to be set up.
The chairman of the Public Accounts Committee (PAC), Bernard Allen, recently warned the country was facing repossession “disaster” if steps are not taken to aid homeowners struggling to pay their mortgages.
Responding, however, Felix O’Regan of the Irish Banking Federation said steps were being taken “day by day, week by week” to tackle mortgage arrears.