AIB has announced a 0.5% increase in interest rates on its standard variable mortgages.
It will bring the rate to 4% per cent and add an estimated €60 a month on to the repayments of a €200,000 mortgage.
This is the second rate rise by AIB, which has been bailed out by the state to the tune of €21.5bn, after they announced another half a per cent hike last month.
Mortgage holders will have their standard variable mortgage rate increased from 3.5% to 4% in November.
The move will affect around 70,000 mortgage holders.
AIB Chief Executive David Duffy has said although the bank is aware of the financial impact that any increase will have on customers the decision is necessary to return AIB to a sustainable operating model.