Finance Ireland is the third lender to raise mortgage rates

Non-bank lender Finance Ireland is the third lender to increase its mortgage rates.

The mortgage provider is raising its three- and five-year fixed rates by 1.2 percent, a bigger increase than expected.

It’s also increasing its 10-, 15-, 20- and 25-year fixed rates by 0.5 percent.

The new tariffs will apply from Monday.

A spokesman for Finance Ireland said: “Our variable and rental rates remain unchanged.”

It comes after ICS Mortgages announced a second increase in its mortgage rates in May.

Three- and five-year fixed rates will increase by 1 percent across all loan-to-value ratios (LTV). It comes just two months after it increased its prices. The latest 1 percent hike means the ICS five-year fixed rate will rise to 3.6 percent from 2.6 percent.

This means an additional €131 per month or €1,572 per year in repayments for a homeowner with a €250,000 mortgage over 25 years and an 80% LTV.

Avant Money, which shook the market here by introducing mortgages for less than 2 percent in late 2020, is increasing its five-, seven- and 10-year fixed rates for new borrowers by 0.2 to 0.3 percentage points.

Last week, the European Central Bank signaled that it could raise interest rates by up to 0.75 percentage points by September.

Mortgage holders are expected to be hit by the first in a series of rate hikes starting next month, a move that will boost annual repayments by more than $1,000 for a family using a typical tracker.

Variable interest rates and future fixed interest rates are also to be raised.

The ECB surprised market watchers when it said it could follow the 0.25 percentage point increase in July with a 0.5 percentage point increase in September if high inflation in the euro zone persists.

Most commentators had expected a 0.25 percentage point increase this summer, followed by another of the same magnitude in the fall.

The ECB has not hiked interest rates in 11 years.

Around 450,000 mortgage account holders are vulnerable to a rise in the ECB’s main refinancing rate because they use tracker or floating rates.

Every 0.25 percent increase in ECB interest rates costs €30 more in monthly payments on a €250,000 tracker mortgage.

That makes 360 € a year. This is based on a tracker with a 1.25 percent margin over the ECB rate, with 20 years left to pay. Finance Ireland is the third lender to raise mortgage rates

Fry Electronics Team

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