Bank of Ireland has followed Bank of Scotland's April initiative in offering a new type of variable rate mortgage - the ECB Tracker Mortgage. The Bank of Ireland mortgage provides for up to a 90 per cent loan-to-value ratio and guarantees to follow the European Central Bank (ECB) rate for the life of the loan.

Changes in interest rates will be passed on to customers within five working days.

The Bank of Ireland tracker mortgage will be locked in at 1.35 per cent above the ECB rate and is available to all new and existing customers. Based on the current ECB rate of 4.5 per cent, the mortgage will be introduced at 5.85 per cent (APR 6 per cent). There is a special one-year discounted rate of 5 per cent (APR 5.9 per cent).

Bank of Scotland offers better rates for lower loan-to-value ratios. Its tracker mortgage promises to remain 1 per cent above the ECB base rate for

loans of up to 60 per cent loan to value. For loans of up to 80 per cent loan to value, the tracker mortgage guarantees to remain 1.25 per cent above the base rate, giving a starting rate of 5.75 per cent.

However, the Bank of Ireland mortgage will pass on rate changes quicker than its competitor. Bank of Scotland guarantees to respond to changes within 30 days.

Ms Olive Moran of Bank of Ireland Mortgages said the ECB tracker mortgage was set up in direct response to customer research.