Bank of Ireland increases fixed mortgage rates by 0.25%

DUBLIN (Reuters) - Bank of Ireland followed main rival AIB in increasing mortgage interest rates after the European Central Bank began to hike its rates, adding a smaller 0.25% to the cost of a new fixed-rate mortgage on Thursday.

AIB, the country's largest mortgage lender, last month became the first Irish bank to increase its fixed rates since the ECB began to push rates up at its fastest pace on record. It increased new fixed rates by half a percentage point.

While Ireland's third high street lender Permanent TSB has yet to move, non-bank mortgage lenders in the market - ICS Mortgages, Avant Money and Finance Ireland - have increased the cost of mortgage products in recent weeks.

(Reporting by Padraic Halpin; Editing by Jan Harvey)