Huge blow to Irish mortgage holders as ECB announces ANOTHER hike – with thousands of people hit by new move here

IRISH borrowers have been dealt another blow as the ECB is expected to hike rates AGAIN after four hikes last year.

The central bank governor said he would not be surprised if interest rates hold into the second quarter of the year after two expected hikes in February and March.

The Governor of the Central Bank of Ireland, Gabriel Makhlouf, expects interest rates to rise

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The Governor of the Central Bank of Ireland, Gabriel Makhlouf, expects interest rates to risePhoto credit: Reuters

The ECB has effectively committed to raising interest rates by half a percentage point to 2.5% next week.

But policymakers are expressing mixed preferences for March, suggesting the debate is wide open despite guidance for significant policy tightening at a “steady pace”.

Central bank governor Gabriel Makhlouf said rates need to rise again in March as things stand, but policymakers “have to wait and see exactly what the data tells us”.

Makhlouf told lawmakers in Dublin: “Considering that inflation is very high and core inflation has actually edged up slightly, it wouldn’t be surprising if we continued on this trajectory of rate hikes beyond the first quarter.”

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While euro-zone inflation fell to an annualized 9.2 percent in December from 10.1 percent in the previous month, Irishman Makhlouf said it remained “way too high”.

He said: “Interest rates need to rise significantly at a steady pace to reach levels sufficiently restrictive to ensure a timely return of inflation to our 2% medium-term target.”

This comes after Irish mortgage holders were hit earlier this month after Permanent TSB announced the second hike in its mortgage rates in just two months.

On Monday, January 16, the bank increased interest rates on its fixed interest rates by a weighted average of 0.51 percent.

The increase means a typical first-time buyer will pay an additional €120 on top of the monthly cost of their mortgage.

Bank of Ireland and AIB are now expected to follow suit and increase their fixed interest rates.

Permanent TSB said the increases ranged from 0.05 percent to 0.8 percent, depending on the length of the fixed term, the size of the loan and the size of the loan relative to the value of the property in question.

It added that there would be no changes to existing fixed rates for mortgage customers and there would be no changes to floating rates for new or existing mortgage customers.

The interest rates applicable to Tracker mortgage customers will continue to reflect the current ECB interest rate in line with the specific terms of the loans.

https://www.thesun.ie/money/10115680/major-blow-irish-mortgage-ecb-interest/ Huge blow to Irish mortgage holders as ECB announces ANOTHER hike – with thousands of people hit by new move here

Fry Electronics Team

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