How does lender's credit rating indicate their likelihood of raising variable rates?

[DublinJ]

While reading the news about AIB's change of strategy last week (reduce staff and hike rates), I wondered if they are offering artificially low variable rates at the moment to grab market share and then rise rates once enough people are borrowing from them?

The perception I would like to check are the following (correct me if I'm wrong):

1. A bank credit rating defines the interest they pay on the money they lend to mortgage holders
1.1 The bank with the highest rating (healthier) will be less likely to increase variable rates, as they are under less pressure from the institutions (other banks?) that lend them money.
2. Once you have a mortgage from a bank, you cannot switch to another.

Does it make sense to get a mortgage from a healthier bank then, so it pays off long term?

Thanks for any comments...

 

[ryaner]

These are strange times with mortgage rates below deposit rates in lots of cases. One thing is certain, rates will go up eventually no matter where you get your loan. We are unlikely to hit a point the likes of what happened with PTSB again, hopefully.

As for the credit rating thing, AIB is owned by the Irish Government so its credit rating shouldn't matter much given that when AIB borrow it is technically you and I who are borrowing. Again, strange times.