AIB: No intention to increase mortgage rates 'at this point'
Allied Irish Bank has no immediate plans for an interest rate hike but its mortgage repayments will increase at some stage in the future, its managing director said today.
Robbie Henneberry said the bank’s standard variable rate for mortgages was well below the average and would inevitably have to rise.
However, the bank chief insisted there was no present plan to follow in the footsteps of Permanent TSB which sparked outrage over the weekend with a 0.5% hike, increasing monthly repayments by up to €70.
“At this point in time we have absolutely no intention of increasing our rates in the standard variable market,” he said.
“That will not persist forever because market forces will dictate at some stage in the future when this economic cycle improves and interest rate cycle changes, that that will change.”
Mr Henneberry said AIB has 40,000 customers on a standard variable rate mortgage, which represents one in three mortgages in the State.
Paving the way for a future hike, he compared AIB’s 2.25% rate with the 4% charged by some of the UK’s main lenders. “We are at a low point in the interest rates cycle and at some time it is inevitable that they will increase,” he told a parliamentary committee.
Public outrage over the hike by Permanent TSB, which is covered by the State bank guarantee scheme, led to cashiers being threatened and even spat on, according to union leaders.
Unite, which represents 1,000 staff, said at least 10 workers reported being verbally abused and physically threatened in branches around the country.
The move sparked fears that other lenders would follow suit.
