AIB is raising its fixed interest rates for the second time in just over a month

AIB will raise its fixed rates for the second time in just over a month.

Last month, the bank increased all fixed rates by 0.5 percentage points.

It is now increasing the fixed rates on AIB, EBS and Haven by a further 0.5 percentage points from close of business today.

However, customers who take out their new mortgage by January 16 can use the previous rates.

The floating interest rates do not change, the tracker interest rates move in parallel with the European Central Bank interest rate.

The banking group blamed rising funding costs after the European Central Bank hiked interest rates from 0 to 2 percent three times since July.

AIB is also introducing a one-year term deposit rate that pays 0.5 percent for amounts over €15,000.

This corresponds to a 0.25 percent increase in the previously announced fixed deposit interest rate.

Some fixed rates from AIB and Haven will now be above 4 percent.

The 10-year AIB fixed rate for those with a loan to value greater than 80 percent is 4.30 percent.
Haven’s one- and two-year rates are 4.15 percent each.

Last month’s higher fixed rates at brands AIB, EBS and Haven have pushed up the repayment costs on some fixed rates by €300 per year.

Broker Michael Dowling said this latest rise will mean fixed rates will be up 1 percentage point in six weeks.

He said the latest increase will increase monthly repayment costs by €70 on €250,000 mortgages over 30 years.

The annual increase is €840.

Putting two increases together means annual repayments have increased by €1,700 over a year, Mr Dowling said.

It comes a day after Ulster Bank said it would raise its fixed rates far more than other banks.

Ulster Bank’s new rates will only apply to its existing customers as the exiting bank will no longer offer mortgages to new customers.

Two-, four- and seven-year fixed rates increase by 0.75 percentage points.

Ulster Bank said it will honor the original interest rates on these trackers and will compensate customers who have already applied for a fixed rate, even if they have not yet reached the stage of a loan offer.

This also applies to existing customers with a variable tariff who have applied for a fixed tariff from us but have not yet completed the product change.

Customers with fixed plans expiring in November or December of this year can also access existing plans up to the expiration date of their current plan.

Permanent TSB increased its fixed rates by an average of 0.45 percentage points, with the Bank of Ireland opting for a 0.25 percentage point increase.

None of the three largest banks have increased their variable interest rates.

ICS Mortgages, Finance Ireland and Avant Money have each hiked rates on certain products since the European Central Bank moved for the first time in July. AIB is raising its fixed interest rates for the second time in just over a month

Fry Electronics Team

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