Sharp rise in prices will hit Irish households as ECB raises key mortgage rate

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A MAJOR price hike is expected to hit Irish households as the European Central Bank raised its key rate.

The decision will affect hundreds of thousands of mortgage holders who are on trackers.

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Announcement will reach 250,000 mortgage holders from todayCredit: Getty

The ECB raised its key rate by 0.50%.

Banks are also expected to raise variable rates – but no increase in variable rates is expected in the coming weeks.

The move should mean a family with a typical tracker will face an extra £47 a month in repayments, according to mortgage broker Joey Sheahan.

This would mean an extra €567 per year in reimbursements.

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Head of credit at online brokerage MyMortgages.ie, Mr Sheahan said there would be a bigger rush to fixed rates.

He told Independent.ie: “Thousands of people are going to be scrambling to fix their rate now.

“The decision to increase rates by 0.50 percentage points means a family with a typical tracker will face an additional €47 per month in repayments.”

This figure is based on a follow-on mortgage of €250,000 – with 25 years remaining, or a margin of 1% over the ECB rate.

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Bank Of Ireland said: “For customers who hold a trailing mortgage with Bank of Ireland, following any European Central Bank rate increases, Bank of Ireland will communicate any changes to their trailing rate to our customers. in an appropriate and timely manner.”

Bank Of Ireland said it would keep the fixed and variable rates under review.

AIB also said it would keep its rates under review.

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The permanent TSB said it could absorb the ECB’s rate hike without passing the cost on to borrowers.

Banks are expected to raise their key rates one month after an ECB rate hike.

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