KBC bank adds 0.20% to standard variable rate

KBC BANK Ireland has become the latest lending institution to push up mortgage rates for homeowners, adding 0.20 per cent to its standard variable rate to bring it up to 3.85 per cent.

The move, which will hit 27,000 borrowers, means that a homeowner with a €300,000 mortgage over 30 years will now see their monthly repayments increase by €34, up to € 1,406. The bank previously raised its variable rate by 0.41 per cent in April.

KBC’s decision, which is effective as of September 1st, follows similar rate rises from Permanent TSB, ESB, Bank of Ireland and AIB over recent weeks.

According to John Delaney, director of the homeloans division at the bank, it is the cost of the bank’s funding which is driving up interest rates for homeowners.

“The decision to increase our standard variable rate reflects the continuing high cost of attracting funds to support the mortgage market in Ireland.”

Last week KBC reported an increase in arrears in the second quarter of the year and the latest rate rise might push more homeowners on to dangerous ground.