Finance Ireland, a non-bank lender, has become the third lender to raise mortgage rates.
Mortgage companies are raising their 3-year and 5-year fixed rates by 1.2%, which is higher than expected.
We are also raising the fixed interest rate for 10, 15, 20, and 25 years by 0.5%.
The new rates will be applied from Monday.
“Our volatility and buy-to-let rates remain the same,” said an Irish financial spokesperson.
This was after ICS Mortgages announced a second rise in mortgage costs in May.
Its 3-year and 5-year fixed rates increase by 1% in all loan-to-value (LTV) bands. It’s only two months since I raised the rate. The latest 1pc increase means that the ICS 5-year fixed rate will go from 2.6pc to 3.6pc.
This means an additional € 131 per month or € 1,572 per year for the repayment of a homeowner with a mortgage of € 250,000 over 25 years and a loan-to-value of 80%.
Avant Money, which rocked the market here when it launched less than 2 percent mortgages at the end of 2020, is raising fixed rates for new borrowers by 0.2 to 0.3 percentage points over 5, 7, and 10 years.
Last week, the European Central Bank suggested that it could raise key lending rates by 0.75 percentage points by September.
Mortgage holders will be hit first by a series of rising interest rates starting next month. This is a move to boost annual repayments of families with typical trackers by more than € 1,000.
Floating rates and future fixed rates will also be raised.
The ECB surprised market watchers when it said that if high inflation continued in the euro area, it could follow a rise of 0.25 percentage points in July and a rise of 0.5 percentage points in September.
Most commentators expected a 0.25 percentage point increase this summer and another increase of the same size in the fall.
The ECB hasn’t increased that rate for 11 years.
Approximately 450,000 mortgage account holders are vulnerable to the ECB’s major rises in refinancing rates because they are trackers or floating rates.
For every 0.25pc increase in the ECB rate, the monthly repayment of a € 250,000 tracker mortgage will cost € 30 more.
It works for 360 euros a year. It has a margin of 1.25pc for the ECB rate and is based on the tracker for the remaining 20 years.
