Variable and tracker interest rates are likely to increase in July as well as September, according to the European Central Bank (ECB).
Those with mortgages linked to these rates could face two increases of 0.25pc, which means an extra €360 a year on a €250,000 tracker mortgage with a margin of 1.25pc over the ECB rate and a 20-year repayment plan. Mortgage holders will have to fork out an additional €720 a year if rates increase by 0.5pc.
Meanwhile, the ECB announced that it will end its bond-buying programme from 1 July, 2022.
Mortgage lenders Permanent TSB, Bank of Ireland, and EBS recently reduced some of their rates but ICS Mortgages and Avant Money increased some of their rates. This is despite mortgage rates falling in April, as indicated by the Central Bank of Ireland. Average rates for new mortgages fell marginally to 2.77pc in April 2022 from 2.78pc the previous month.
The Bank says that Ireland has the second-highest mortgage rates in the 19-country Eurozone. Greece has the highest mortgage rates.
Meanwhile, the ECB could announce the reversal of a decade-long policy at its governing council meeting this week – by increasing its key lending rate.