ECB rate rise to hit almost 250,000 mortgage holders

• Published date: 17 March 2023
• Publication title: Irish Times (Dublin, Ireland)

EOIN BURKE-KENNEDY and MARTIN WALL Almost 250,000 people will see their monthly repayments on tracker mortgages automatically rise again following a half-point interest rate increase from the European Central Bank (ECB)

Tracker-rate mortgage holders will bear the immediate brunt of the ECB's rate hike with borrowers shouldering an increase of €25 a month for every €100,000 they have borrowed. On a €300,000 mortgage, this would add close to €1,000 over a year. The outstanding sum left to be repaid on the average tracker mortgage stands at about €80,000, though tracker customers who encountered financial difficulties and have higher balances will face bigger repayments.

On his St Patrick's Day visit to the US, Taoiseach Leo Varadkar said the latest rate increase was "not a surprise" but he was "very conscious" that mortgage holders faced a further increase in repayments and this was "unwelcome". Mr Varadkar urged the banks to increase savings rates, saying they "cannot have it both ways" and should not be raising mortgage rates if they are not also raising savings rates. He said there were "no plans at the moment" to reintroduce mortgage interest relief to help borrowers with higher repayments, rejecting calls from Sinn Féin to apply the relief.

Planning to fix Mortgage advisers warned that more people would be caught by rate hikes with rising borrowing costs spreading from tracker to variable mortgage holders and those planning to fix.

"Others are increasingly being drawn into the firing line," said Trevor Grant, chairman of the Association of Irish Mortgage Advisers. While tracker mortgages have been "most exposed" to the hikes since July, others on variable rates and customers coming off low fixed rates faced "a shock" in the coming years, he said.

"There are about €12 billion worth of mortgages rolling off low fixed rates over the next three years and they face...