LAST UPDATE | 26 Jul 2023
BANK OF IRELAND has increased interest rates on fixed rate mortgages for the fourth time in less than a year.
From today, fixed rates will go up by 0.25% for new and existing customers.
This increase includes customers who are coming to the end of their fixed-rate period and are seeking to re-fix their mortgage, and to tracker rate or variable rate customers who wish to move to a fixed rate.
However, mortgage applicants who already have a credit approval and who draw down their mortgage by 24 August can still avail of previous fixed rates.
Bank of Ireland said the increase follows “cumulative increases of 4% in European Central Bank rates since July 2022”.
It’s anticipated that the European Central Bank is set to raise rates again at its next meeting tomorrow, with observers expecting another 0.25% hike.
Daragh Cassidy, head of communications for bonkers.ie, said the increase was “widely expected given the huge increase in rates from the ECB over the past year”.
However, he said the “hike was lower than expected”.
“Since last July, the ECB has hiked its main lending rate by four percentage points,” said Cassidy.
“But even after today’s hike, BOI has only increased its fixed rates for new customers by 1.75 percentage points and by even less for existing fixed customers”.”
Cassidy added that the likelihood of another ECB hike tomorrow to 4.25% means “there’s currently a 50/50 chance the ECB will raise rates again in September to 4.50%”.
“This means more rate hikes are almost a certainty from BOI, and indeed all the other lenders, over the coming months,” said Cassidy.
He said that by the end of the year, “the best mortgage rate on offer in the entire market will probably be over 5%, with the average rate even higher”.
Bank of Ireland is also introducing a new term deposit account for personal and business customers, which will be available from tomorrow.
The interest rate on Bank of Ireland’s SuperSaver account will rise by 0.5% to 2%, while there is a new two-year term deposit account at 2% for personal and business customers.
The fixed rate on new one-year term deposits will also increase by 0.25% to 1.5% for both personal and business customers.
The variable rate on new and existing 31-day notice accounts will increase by 0.47% to 0.5% for personal and business customers.
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