Friday 23 February 2018

Variable-rate homeowners spared hike

Charlie Weston

THOUSANDS of homeowners who have variable-rate mortgages with AIB have been spared a rate rise -- for now.

The bailed-out bank said yesterday it was passing on the 0.25pc rise in the European Central Bank (ECB) interest rate to its tracker customers with effect from today.

Personal loan rates and overdraft rates for small firms and consumers are also going up by 0.25pc.

But around a third of AIB's residential mortgage holders who are on standard variable and loan-to-value (LTV) rates escaped a rise. The bank has €19.4bn in residential mortgages.

AIB said it was keeping variable rates under review.

A spokesman for the bank denied it was afraid to hike rates after the Programme for Government included a provision stating that the Government would force state-supported banks to cut costs to fund a reduction of 0.25pc in variable rates.

AIB's standard variable rate is 3.25pc, and its loan-to-value rates are between 3.09pc and 3.49pc.

Personal loan rates for consumers will rise to 12.2pc. The rate for small firms will also jump by 0.25pc to 8.2pc.

Overdraft rates will go to 15pc. This is based on a chequebook overdraft, with a €1,270 limit and a facility fee of €25.39.

Bank of Ireland said its rates were under review, but it had no immediate plans to increase rates, apart from trackers.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business