Buy-to-let mortgage holders in Ireland face further problems in the near future as the Bank of Ireland plans to raise interest rates, to counteract its own rising borrowing costs. This is despite the fact that almost 8% (7.8%) of landlords with a buy-to-let mortgage are already in arrears, according to a report in The Evening Herald.

Chief executive at the Bank of Ireland, Richie Boucher, said the bank had avoided passing on one ECB interest rate hike this year but said it couldn’t continue to absorb higher costs of borrowing money from international markets without upping its own costs.

The bank has not unveiled when this could happen but it has disregarded talk of any industry-wide debt forgiveness solution for mortgage holders unable to meet their repayments.

The annual charges related to its Irish residential mortgage book jumped by 30% over the past year, to €140m.

This rise is attributed to higher unemployment levels, lower disposable incomes, falling house prices and ‘the general economic downturn in Ireland’.

The impairment on the total Irish and British mortgage book was up by €17m year-on-year to €159m.

As of the end of June, more than 4.5% of Bank of Ireland’s Irish owner-occupier mortgage book was in arrears for more than 90 days - a significant increase from 3.2% at the same time last year. However, this is still substantially lower than the number of landlords in arrears.