BANK of Ireland has been accused of trying to trick customers into giving up their valuable tracker mortgages.
It has written to homeowners asking them to consider a switch to costly fixed-rate loans.
In the letter, the bank tells customers they could consider the change if they are concerned about protecting themselves against future rate increases.
It was posted to 300 customers last month.
The bank quoted the results of a RedC survey that found many people were concerned about the consequences of rising interest rates.
And it suggested that anyone with such worries should contact the bank for advice, which could include switching to a fixed-rate deal.
The revelation provoked anger among some TDs and senators when it was read out at a hearing of the Joint Oireachtas Finance Committee by Labour TD Kevin Humphreys.
A customer with a €200,000 home loan who is currently being charged 2pc interest on a tracker deal would pay an extra €4,800 a year if they switched to a 4.5pc fixed-rate mortgage.
Bank of Ireland's tracker rate ranges from 1.75pc to 2.75pc, the committee was told.
Politicians also heard the bank's fixed interest rates are between 4.3pc and 4.5pc.
Mr Humphreys told Bank of Ireland officials: "I put it to you that you are trying to trick people off tracker mortgages."
However, senior executive Liam McLaughlin said the bank had "no intention to trick" customers.
He said the letter had been sent out as part of research being done by the bank, which wants to know the extent of customer demand for fixed-rate deals so it can source money in the markets.
Monthly repayments for customers with tracker mortgages can change because the interest rate rises and falls in tandem with that set by the European Central Bank.
That rate is at an all-time low -- good news for borrowers, but bad news for banks that are losing money on the trackers.
The interest rate on fixed-rate mortgages is higher, but customers know how much their monthly bill will be for the life of the deal.
Bank of Ireland chief executive Richie Boucher said he believes property prices have stabilised, but some rural areas have seen so little activity that prices are hard to ascertain.
He ruled out using state aid pumped into the bank to finance a general write-off of debt owed by families in negative equity. That would mean handing the money of shareholders or depositors to home owners, he said.
Around 160,000 customers have a mortgage with Bank of Ireland, Mr Boucher said.
Of those, 16,000 mortgages have been restructured, mainly by a switch to interest-only payments or other reductions in monthly repayment levels.
In most cases the intervention has been successful, with 86pc of people with restructured debt now meeting the new payments.
The bank was blasted for doing too little when it comes to the worst-hit home loans.
Bank of Ireland is working on 13 cases where loans could be switched in so-called "mortgage-to-rent" deals that involve people becoming tenants in their homes.