Hundreds of Irish Permanent mortgage holders are facing increased repayments because of a technological fault that meant they were not asked to pay increased interest rates from May 2000.

According to the company, approximately 1,000 endowment mortgage holders were affected by the error and have been informed of their adjusted repayments this week. The average amount of additional interest due per customer is around £200 (€254).

An Irish Permanent spokesman said it apologised for the inconvenience caused and proposed to collect the outstanding amount over the next 12 months.

This extra payment, coupled with the introduction of the delayed interest rate increases, means many customers will see a significant jump in their mortgage repayments.

In a letter to customers, Irish Permanent explained that it had recently carried out a review of its endowment loan book and "although we have applied the interest rate increases to your account from 1st May 2000, we have not billed the additional interest due".

The Irish Permanent spokesman said the customers involved were subject to three or four interest rate increases from May 2000 to the end of the year.

"Because of an IT fault, the increases were not passed on to customer accounts and the extra interest was not paid." He said that back-up systems detected the problem before Christmas and Irish Permanent had written to inform customers of their revised repayments this week.

In one case seen by The Irish Times a couple have had their monthly repayment increased from £173 to £233. The amount of interest due but not billed on their mortgage was £222.15 over nine months. That amount will now be collected over the next 12 months in instalments of £18.51. However, the couple will be paying an extra £60 per month in total when the revised interest rate is applied.

Those paying by direct debit will have their increased payment collected in the normal way at the end of each month. Customers who are paying by standing order must instruct their banks to change the amount of the repayment, Irish Permanent advises.

The company spokesman said Irish Permanent was prepared to talk to customers who had any difficulties with the sudden increase and would discuss the issue on a case-by-case basis.