Bank of Ireland plays down fears that mortgage rates could rise

Bank of Ireland has quashed an early morning newspaper report that it was set to increase its variable mortgage interest rate when new legislation on personal debt comes into effect.

A report in today’s Irish Independent claimed that the new personal insolvency legislation, which will allow some struggling mortgage holders to free themselves of debt, could see lenders raise rates to insulate themselves from losses.

In the article, Bank of Ireland group chief executive Richie Boucher was quoted as saying that the new laws could have a “fundamental” change in the playing field and make mortgage lending more risky.

He said: “We price for risk,” implying that the cost could be passed on to customers in the form of higher interest rates.

A spokeswoman for the bank has insisted, however, that Boucher’s comments were “in the context of a much wider conservation” about the new legislation, and that no consideration was being given to the matter.

“Mr Boucher made very general comments about pricing for risk, across the group,” the spokeswoman said.

Bank of Ireland gave out half of Ireland’s new mortgages last year and currently have variable rates of between 3.4% and 3.8%.