ECB Rate Hike Looms: Irish Mortgage Rates Set to Rise

Mortgage rates in Ireland remained largely unchanged in July compared to June, but lenders are expected to hike interest rates soon as the European Central Bank (ECB) prepares to announce its second rate increase this month.

Mainstream lenders, including AIB, Bank of Ireland, and PTSB, did not raise mortgage rates after the ECB's key lending rate increase in June. However, experts warn that they may move now as the ECB is set to hike rates again this week.

The average interest rate on a new mortgage in Ireland stood at 3.48pc in July, similar to June's figure. Across the Eurozone, the average rate rose for the fourth consecutive month to 3.54pc.

Borrowers are advised to act quickly to lock in current rates as fixed-term products become increasingly competitive. Rates for a three-year fixed mortgage range from 3.20pc to 5.45pc, with variable rates ranging from 3.85pc to 4.85pc for a first-time buyer borrowing €300,000 with a 10pc deposit.

Experts also warn that around 120,000 tracker mortgage-holders will face an increase in their monthly repayments following the ECB's rate hike this week, adding up to an extra €200 per year for some borrowers.