Banks react to ECB interest rate hike

Bank of Ireland has confirmed that it will not pass on the ECB’s 0.5% interest rate hike to its variable rate mortgage customers.

Its fixed-rate offerings will also not be affected by the move.

However, tracker mortgage rates will be affected by the change, which the bank says will come into effect for most customers on August 10.

The bank says it will write to all tracker mortgage customers to confirm the new interest rate – which will now be 0.5% higher than the previous rate – the effective date and the new repayment amount.

He also confirmed that where negative rates were applied to customer balances, this would end from August 3.

At the end of last year, the Bank of Ireland reduced the threshold at which it applies negative rates to €1 million.

The bank charged a rate of 0.65% on these large deposits.

AIB has in recent months applied negative rates to its clients with deposits above 1 million euros at a rate of 0.75%.

It did not say today whether this policy would end with the rate hike announced by the ECB.

He also did not say whether or not he would pass on the rate hike to variable rate mortgage customers.

However, at 3.15% on a mortgage with a loan to value (LTV) above 80%, AIB’s variable rate offer is lower than that of Bank of Ireland at 4.5% and Permanent TSB. , which is around 4%.

AIB said customers with a tracker mortgage linked to the ECB rate would be contacted about changes to their interest rate applied in accordance with their contract.

“We continue to monitor our rates,” the statement added.

Permanent TSB has confirmed that it will not pass on the rate increase to its fixed and variable rate mortgage customers.

“We are pleased to reassure our personal fixed and variable rate mortgage customers that we do not intend to pass on the ECB’s rate hike,” said Eamonn Crowley, CEO of Permanent TSB.

“We will keep our position under review in light of any further market changes,” he added.

Tracker mortgage rates will automatically rise after today’s rate hikes, the bank said.

Ulster Bank said it would write to tracker mortgage customers advising them of their new rates, but indicated no changes to its other rates.

While KBC said it reviews rates regularly as part of its normal business activities and takes note of the ECB’s announcement today.

He also said that any direct impact from rate changes triggered by the ECB will be applied.

“KBC Bank Ireland will communicate any changes to customers in writing in accordance with all legal and regulatory protections,” it said.

Finance Ireland said it was monitoring rates continuously but reported no changes today.

It is understood that variable rate clients represent a small proportion of its overall portfolio.

Spokespersons for Avant Money and Dilosk, which operates as ICS, said they would not make any price announcements today.


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