Irish Mortgage Holders Urged to Review Rates Amid Expected ECB Hikes

Irish mortgage holders are advised to urgently review their interest rates ahead of an expected European Central Bank (ECB) hike next month. Irish mortgage rates rose for the second consecutive month in March, reaching an average of 3.52%, up from 3.51% in February and 3.50% in January, placing Ireland with the seventh-highest mortgage rates in the Eurozone.

The ECB held its key deposit rate at 2% in April but signaled potential increases due to inflation risks from the Middle East conflict. Daragh Cassidy of bonkers.ie noted that the ECB could hike rates three times by year-end, by 0.25% each time. While main Irish lenders haven't yet increased rates, they may if the ECB acts multiple times. Smaller lenders like ICS Mortgages and Nua Money have already raised fixed rates for new customers.

Approximately 40,000 customers are coming off fixed rates this year, many from rates under 2% three or four years ago, facing significant repayment increases. Cassidy recommends consulting a broker to explore switching options. Michael Dowling of Irish Mortgage Brokers stated that 110,000 tracker mortgage customers would feel immediate impact from ECB hikes; a 0.25% hike adds about €13 per month per €100,000 owed. Dowling also suggests fixed-rate customers nearing their term's end check for early exit penalties and consider switching, despite typical €1,000 moving costs, due to bank incentives like cashbacks.

Brokers Ireland warned that the window for lower interest rates is closing due to geopolitical uncertainty and rising inflation, urging all mortgage holders, especially those who haven't reviewed their rates recently, to do so urgently.