AIB HAS ANNOUNCED that it is increasing interest rates on new fixed mortgages by 0.5%. 

The bank says the move follows a decision by the European Central Bank to raise its interest rates by 1.25% since July.

The changes will affect new customers only, and not those on any of the bank’s variable or tracker mortgage rates, nor will existing fixed mortgage rates be affected.

In a statement, the bank said the move also affects customers with AIB, EBS and Haven in the Republic of Ireland.

The new rates are effective from today, though those who have drawn down a new mortgage from 14 November will be able to avail of previous fixed rates.

“AIB has until now only passed on interest rate increases to tracker mortgage customers as the bank is contractually obliged to do,” a statement read.

More than half of the bank’s current mortgage customers are on a fixed rate.

The increase will see those who have a monthly repayment on a new €100,000 five-year fixed rate mortgage with a loan to value of 50-80% over a 25-year term rise from €431.01 to €455.91. 

- Contains reporting by Stephen McDermott.