AIB hikes popular fixed-rate mortgage to 5%

New borrowers face paying much more for their fixed-rate home loans immediately, while existing customers will face significantly higher monthly repayments when their fixed-rate loans come up for refinancing.

AIB has raised the cost of a fixed-rate mortgage popular with first-time buyers to 5%, adding €125 to monthly repayments, and rivals are also likely to hike their fixed-rate mortgages. 

The increases come as Irish lenders start out on the cycle of raising their fixed-rate mortgages following official rate hikes by the European Central Bank since last summer.