Ordinary mortgage bills are set to soar by over €1,000 more a year from today.
Households face another cost of living blow that could add hundreds of euro a month depending on mortgage size. The European Central Bank are widely expected to hike interest rates again this morning in a further bid to dampen inflation.
Last week ECB President Christine Lagarde said a 50 basis points rate hike, equal to half of a per cent, “is very, very likely”. The current rate is 3%, so the latest hike would bring the rate up to 3.5%.
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A homeowner with a fairly standard €300,000 mortgage over 25 years would have to pay almost €80 more a month from today with the new rate, or close to €1,000 extra a year. Trackers automatically see this increase passed on, while fixed rates are adjusted to account for the hikes in the following weeks and months.
Mark Coan, founder of moneyguide moneysherpa.ie, said: “Tracker customers are understandably worried about giving up their tracker, given the sharp practice of Irish banks after the financial crash. However, the biggest risk to tracker mortgage holders now is inaction. If you’re a tracker customer you now need to do two things.
“One, get your fixed rate offer letter from your current lender to secure your fixed rate from your current lender. Two, talk to a mortgage broker to see if you should stick with your tracker, take up your fixed rate offer or fix with another lender.”
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