Bank of Ireland to increase UK mortgage rate

Bank of Ireland is to increase its mortgage rates on its UK residential mortgage book, affecting 100,000 UK customers.

It will raise the standard variable rate (SVR) on its mortgages to 4.49% from 2.99% in two stages.

The rate will rise to 3.99% from June before going up to 4.49% from September, due to the increased cost of funding mortgages, the bank said.

The full increase would lead to an £81 (€97) rise in the monthly cost of a £100,000 (€119,740) repayment mortgage on an SVR rate.

The announcement marks the first increase since August 2007 and the Bank of Ireland said the new rate will remain "competitive" when compared with its UK peers, many of whom already have rates above 4.5%. The bank said the change does not affect Post Office customers.

It said in a statement: "The cost of funding mortgages has increased significantly for UK lenders in recent years, including Bank of Ireland. For this reason, it is necessary for Bank of Ireland to increase its SVR.

"All Bank of Ireland mortgage holders affected by the increase are being notified about the changes.

"Bank of Ireland has provided a dedicated support line for any customer concerned about the impact of the increase on them (0800 952 0041).

"Bank of Ireland has a range of mortgage options available to its UK customers should they wish to review their options."

The move follows Halifax's announcement on Sunday that it is raising its SVR rate.