Tens of thousands of mortgage holders with KBC will have to find more than €300 extra this year to cover the cost of their home loans after the bank announced it was increasing its Standard Variable Rate (SVR) mortgages by 0.25 per cent.

From the beginning of March, KBC’s SVR for owner-occupiers will increase from 4.25 per cent to 4.5 while the rate for buy to let customers is going up to 5.15 per cent from 4.9 per cent.

The bank said it was mindful of the impact the rate hike would have on its customers but blamed the “continuing high cost of funding mortgages in the Irish market”.

Late last year the Belgian bank opened its first branch in the Republic on Dublin’s Baggot Street and it plans to double its number of mortgage customers over the next three to five years. Its stated objective was to double its mortgage book to 250,000 over the next five years.

The bank grew to be the fifth-biggest mortgage lender in the boom with a loan book of €13 billion, but its SVR rates are higher than the average.