LENDER Permanent TSB is to increase the cost of its fixed-rate mortgages for the third time since the summer.

The bank is also raising the interest rate on its deposits for savers.

New fixed-rate mortgages are set to be 0.75 percentage points more expensive with effect from Wednesday.

This is one of the larger increases seen in this market.

An increase of 0.75 percentage points adds €130 a month to the repayments on a €300,000 mortgage over a 35-year term, according to financial adviser Michael Dowling.

Most of the bank’s fixed rates will now be more than 4pc, double what they were a year ago.

The bank is also increasing business lending rates.

There is no change to its variable mortgage rates, and tracker rates rises each time the European Central Bank increases its rates, in line with the contracts on trackers.

The move to increased fixed rates will not affect those on existing fixed rates, but it will mean borrowing becomes more expensive for new buyers and switchers. It will also make it costlier for those coming off a fixed rate to take out a new one.

Permanent TSB is responding to the fact that the European Central Bank refinancing rate has risen five times since last summer, and is set to go up again this month.

This is the third time since last summer that Permanent TSB has increased its fixed rates, with a cumulative increase of 1.7 percentage points since then.

Rising interest rates have added thousands of euro to the cost of paying for a mortgage for a typical first-time buyer couple.

The cost of paying a mortgage for a new buyer couple is €3,000 more annually than this time last year.

Permanent TSB has responded to complaints from savers that ECB rate rises are not being passed on to them with new rises in savings rates.

There are increases in rates paid to savers on demand, notice and fixed term deposit products.

For demand deposits, the rate paid on the Online Regular Saver Account for amounts up to €50,000 will increase by 0.35 percentage points to 0.75pc.

For notice deposits, the rate paid on the 21-Day Regular Saver Account for amounts up to €50,000 will increase by 0.35 percentage points to 0.75pc.

For fixed-term deposits, the rates paid on fixed-term deposits from six months to five years will increase by between 0.20 percentage points and 0.50 percentage points.

And the bank is increasing business term loan rates. For secured loans, the rate will increase by 1 percentage point to 5.5pc. For unsecured, the rate will increase by 1 percentage point also to 7.5pc.

Broker Michael Dowling said the increases in the mortgage rates would be another blow to hard-pressed mortgage customers.

He said: “Permanent TSB now has the dearest fixed rates of the three pillar banks.”

Mr Dowling said an increase of 0.75 percentage points adds €130 a month to the repayments on a €300,000 mortgage over a 35-year term.

Last month, non-bank lender Finance Ireland increased the cost of its mortgages. The lender is increasing its standard variable rate by 1 percentage point with effect from March 16 next.

The will mean the variable rate at Finance Ireland will be between 5.75pc and 6.15pc, depending on the loan to value.

AIB, Bank of Ireland, Ulster Bank, Avant Money and ICS Mortgages have all increased their mortgage rates, with some announcing a number of rises. AIB has also increased its variable rate.