Banks have raised interest rates on variable mortgages by an average of more than two percentage points over tracker rates since 2008 when the difference between the two rates was close to zero, a Central Bank report has found.

The difference between variable and tracker rates varies between 1.4 and 2.8 per cent, indicating some lenders raised borrowing costs for variable rate customer more than others.

The banks cannot adjust tracker mortgages as they follow the ECB rate which is well below the cost at which banks raise funding.