This could translate to thousands of additional payments
Some mortgage holders are in for a price hike as the European Central Bank announces changes to their rates once again.
The ongoing cost of living crisis in Ireland has many families struggling to make ends meet and so the seventh increase since last summer will come as a major blow for many.
According to reports, the European Central Bank is expected to increase its lending rates by at least .25% on Thursday – but some economists have warned it could be as high as .5%.
This could translate to thousands of additional payments for those on tracker and variable rate mortgages in Ireland.
It would also increase the cost of fixed-rate mortgages for first time buyers in Ireland.
An Economist with Davy Stockbrokers, Conall MacCoille told the Irish Independent that the higher rate increase is possible due to a marginal fall in the core inflation.
However, more strict lending and the uncertainty with US banks could indicate they will go ahead with the smaller .25% increase.
MacCoille said: “Either way, it is not good news for mortgage holders.”
There are around 171,000 Irish tracker mortgages that are impacted every time there is an ECB rise.
Experts have indicated that if a .25% increase goes ahead, a typical tracker mortgage customer with just 11 years left of repayments would be facing a yearly increase of €200.
If the higher .5% increase is put in place, then a typical tracker mortgage holder with 11 years left of repayments would be forking out an additional €390 per annum.
This will also mean that the mortgage rate would be pushed up to 5.15% – up from 1.15% in June 2022 – which marks a total increase of €2,553 per year.
