Bank of Ireland says it will absorb ECB rate hike for its variable rate mortgage customers

Bank of Ireland tracker mortgage customers will be charged the additional 0.5%

Bank of Ireland has said it will absorb the cost of Thursday’s rate increase by the European Central Bank for its mortgage customers paying their home loans on variable rates.

It comes as ECB, led by president Christine Lagarde, unveiled a larger than expected half point hike in official rates as the central bank steps up its battle against inflation that has flared since Russia invaded Ukraine on February 24.

However, Bank of Ireland tracker mortgage customers will be charged the additional 0.5% increase because tracker rates are directly linked to the official rates of the ECB.

It is now “a wait and see situation”, said a Bank of Ireland spokesperson, referring to future rate decisions by the ECB in the coming months.

All Irish banks, including AIB and Permanent TSB, have come under pressure in recent days to absorb the anticipated increase in ECB rates for their variable rate mortgage customers.