MANY mortgage providers are likely to raise their rates after ICS became the first in years to raise lending costs.
t is raising the new fixed rate by 0.45 percentage points.
Home loan interest rates are already at a 12-year low in the country, but there are now expectations that the European Central Bank will raise its benchmark interest rate from the end of the year.
ICS Mortgages, which is owned by Dilosk, said it is increasing the percentage of fixed mortgages for apartment owners with immediate effect.
The changes will not affect existing fixed or variable rate customers, or applicants with existing loan offers on agreed terms from ICS Mortgages.
The increase “reflects significant upward pressure on funding costs for fixed-rate products in international markets,” said ICS Mortgages commercial director Ray McMahon.
“This is the result of significant exchange rate volatility in capital markets due to inflationary pressures across Europe and globally,” he said.
Borrowers are increasingly looking for fixed products as interest rates here are at 12-year lows and likely to rise.
ICS increases are for 3-year and 5-year fixed products, with increases for products in the loan-to-value range.
The 5-year interest rate for those with loans worth 60pc or less will be from 1.95pc to 2.40pc.
This means that someone who borrowed €250,000 would now have to pay €62 a month more to lock in this rate. For more than a year, turnover stood at 744 €.
Five-year fixed-rate mortgages with a loan worth less than 80pc will increase from 2.2pc to 2.6pc.
ICS’ three-year flat rate on mortgages with a loan-to-value ratio below 60pc will increase from 1.95pc to 2.25pc.
According to Doddl.ie chief executive Martina Hennessy, this is a sign that mortgage rates are likely to go up.
“After mortgage rates fell for a number of years, the rise of ICS Mortgages is a reminder that we are in a low interest rate environment, with mortgage rates the lowest in more than 12 years.
“The pressure to raise funding costs could lead to other lenders raising interest rates in the not too distant future,” Ms. Hennessy said.
“These rate increases, while unwelcome, reflect volatility in the global capital markets that ICS, as a non-banking lending institution, depends on for funding. ”
Ms. Hennessy said the current environment of low rates and rising home values provides an opportunity for mortgage holders to lock in lower interest rates and protect against an overall increase in the cost of living.
The European Central Bank is expected to increase its primary lending at 0.25pc, from 0pc, later this year. It worries about rampant inflation in the Eurozone.
Its prime refinance rate has been at zero since March 16, 2016.
The ECB rate hike will make variable and track mortgages more expensive. It will also mean a lower new fixed price.
Around 200,000 homeowners are using standard variable rates and will pay more with fees across Europe expected to increase in the coming months.
Around 250,000 are being watched, rising or falling as the ECB rate changes.
https://www.independent.ie/business/personal-finance/property-mortgages/other-lenders-expected-to-hike-mortgages-after-ics-move-41444564.html Other lenders expected to increase mortgages after ICS move