BANK OF Scotland Ireland has informed mortgage brokers it is no longer offering mortgages for more than 90 per cent of the value of houses being purchased by owner occupiers.

For apartments, the new debt to value ratio has been reduced to 80 per cent, as has the ratio for would-be buy to let customers.

The bank, which issues mortgages through brokers, had been offering 95 per cent mortgages in all categories up to Tuesday, as well as 100 per cent mortgages in certain circumstances.

The new ratios reflect current weakness in the property market and economic considerations generally. The bank has also increased its mortgage interest rates in response to the higher rates being charged in the wholesale banking market.

A spokesman for the bank said a letter had been sent out to brokers earlier this week advising them of the increased rates and the tightening of lending criteria.

The brokers were also told that a number of fixed-rate products had been withdrawn and their prices were being reviewed.

Although the European Central Bank has not adjusted its rates, banks are charging more for money they lend to each other, because of the credit squeeze caused by the subprime crisis.

"The cost at which we borrow money has gone up a lot in the past few weeks, reducing our margins," said the Bank of Scotland Ireland spokesman. "So as to make [ our products] commercially viable, there had to be an increase in our margins."

Although rates varied according to the circumstances of borrowers, in general rates had gone up by 0.2 to 0.4 of a percentage point, he said.

The spokesman said the lower debt to value ratio for apartments was a reflection of the fact that prices for apartments have dropped more than have prices for detached and semi-detached houses.

The ratio for investors was altered "to ensure we know the customer has a good level of equity. It is more prudent banking to ensure that our customers are not over-stretching themselves."

Some people who had received offers from the bank, but had not yet taken them up, have had their offers withdrawn and new offers made.

Offers that have been accepted are being honoured, the spokesman said.

Halifax, which is owned by Bank of Scotland Ireland and which issues mortgages directly to customers, has not altered its interest rates, he said.