Bank of Ireland has increased rates for longer-term fixed mortgages but has cut the rates on shorter-term mortgage loans.
Five- and 10-year fixed rates have been increased by 20 basis points (0.2 of a percentage point) to 3.2 per cent and 3.5 per cent respectively.
At the same time, the bank has reduced its one and two-year rates to below 3 per cent, down 0.1 of a percentage point to 2.9 per cent. Its three-year fixed rate remains unchanged at 3 per cent.
"While, to date, we have provided a flat 3 per cent rate across most of our fixed rates, today's adjustments are consistent with the medium-term market expectations in relation to rates. Our fixed-term rates have been very popular, with more than nine in 10 new owner occupier mortgage customers opting for fixed rates in 2018," said head of mortgages Brian Vaughan.
He said the new rates were available to new customers and also to existing customers currently on a variable rate and to those coming to the end of a fixed-rate period.
In a note to investors, analysts at stockbroker Davy said that, while rates have been falling over the past three years, neither Bank of Ireland nor AIB had cut their mortgage pricing. It suggested other banks would be weighing similar increases.
“While mortgage rates in Ireland are significantly higher than other euro zone countries, so too are capital requirements, and the increase in longer-term rates is important to ensure returns remain acceptable,” the broker said.
