An expected 250,000 homeowners are to be hit by the ECB’s recent decision to increase interest rates by 0.5%, with tracker mortgages to be hit first. A rise in variable interest loans is also on the cards, but not expected from banks for another few weeks.
Rush to lock in fixed rates
Many now expect homeowners to rush to lock in a fixed rate for their mortgages as the new hikes will mean a family with a typical tracker is facing an extra €57 a month in repayments, which works out at €685 a year in higher repayments (based on a tracker of €250,000, with 25 years remaining, on a 1pc margin over the ECB rate).
High Variable Rates
Ireland already has some of the highest mortgage rates in the EU, with the average new mortgage costing 1% more than the average rate in the Eurozone. For example, on a €300,000 mortgage, this works out at €250 more interest per month. The average rate for a new mortgage in this country is 2.73pc compared with 1.76pc across the Eurozone.
What to do now?
If you are going to be affected by a potential rise in variable rates, it may be time to contact your banking institution and discuss options around securing a fixed rate mortgage instead. Remember, that if you have been on a fixed rate, but that has expired, you will be put on a variable rate unless you arrange a new fixed rate with your lender (which many don’t know or get around to doing)
Property Management Company Dublin
At KPM Group we have over 25 years experience in property management and will be happy to help in any way we can. Call today and see how our team can assist you.
