Last week Christine Lagarde, the European Central Bank (ECB) president, didn’t ruled out an ECB rate rise, which would see tracker and variable rates rise, and new fixed rates become more expensive.
As such, mortgage holders have been warned that rates have hit rock bottom and the next moves are likely to be increases.
This comes at a time as AIB’s broker-focused subsidiary Haven cut two of its fixed rates, and follows reductions from non-bank lenders Avant Money, ICS Mortgages, Finance Ireland and EBS.
Dutch Central Bank president and a member of the ECB’s governing council, Klaas Knot, said he expects the ECB to raise interest rates in the fourth quarter of this year. He anticipates an interest rate rise of 0.25pc between October 2022 and the year’s end.
Head of mortgages at Avant Money, Brian Lande, comments that it looks like we are at the bottom of the mortgage rates cycle.
“We look to be at the bottom of the market, so now is the time to lock into a longer-term fixed rate. With rising inflation, the funding markets are pricing in a future ECB rate increase and we have seen market funding costs rise by an average of 20 basis points since December.” Lande said that in five years’ time we are likely to look back at current fixed rates as being the “deal of century”.
Irish mortgage provider ICS also indicated that home loan interest rate rises this year cannot be ruled out, given the inflationary backdrop that exists.
LSL News.