AIB has announced its raising its standard variable mortgage interest rate by 0.5%.

For owner-occupiers the rate will now be 3.5%.

The news is contained in the half-year results from the bank which were released this morning.

In a further update on its cost cutting plans the bank has also announced 45 sub-office closures and 6 branch amalgamations will take place from October across the country.

There will also be a further 16 branch closures next year.

Management says they incurred an operating loss of €1.1 billion in the 6 months to the end of June.

That is down 64% on the same period last year.

Newstalk’s Business Editor Ian Guider says other banks have been lowering interest rates lately.