IRISH homeowners have been warned to asses their mortgage options ahead of an “almost certain” rise up in rates.
It comes as Ireland ranks as the tenth most expensive country in the Eurozone for mortgages rates, according to the latest Central Bank report.
Irish mortgages rates remained broadly steady in April, according to new data from the Central Bank of Ireland.
The average mortgage rate for April was 3.50 per cent, down slightly from 3.52 per cent in March, and just above the Eurozone average of 3.45 per cent.
But despite the recent expert have warned that rates are “likely to increase” again over the coming months, potentially even twice.
Bonkers.ie issued the alert ahead of a meeting of the European Central Bank tomorrow that is expected to bring about a quarter of a percent increase in mortgage rates.
Head of Communications at the price comparison website has now warned customers on variable rates to “assess their options” in order to avoid sudden increases.
Darragh Cassidy explained: “The ECB meets tomorrow and is almost certain to hike rates by a quarter of a percentage point to 2.25 per cent.
“And it currently looks likely to hike rates at least once more this year, perhaps twice.
“So, it’s likely we’ll see wider rate increases from mortgage lenders over the coming months.”
He continued: “Anyone on a fixed-rate mortgage is protected for now as their rate won’t change until the end of the fixed term. But those on variable rates would be wise to assess their options. And anyone rolling off a fixed rate over the coming months should start looking at their options carefully too.
“There are thousands of mortgage customers who took out fixed rates as low as under 2 per cent three or four years ago.
“These fixed-rate terms are now coming to an end, and many borrowers can expect a significant increase in their repayments when they come to re-fix, especially if they don’t compare all the options on the market.”
Trevor Grant, chairperson of Irish Mortgage Advisors also agreed that an ECB rate hike “looks all but inevitable”.
He urged homeowners to act “quickly” ahead of the anticipated hike.
Grant said: “If, as expected, the ECB hikes its rate tomorrow, this will mark a significant shift in ECB policy as it will be the first rate increase in almost three years.
“This could be an opportune time for borrowers to fix their mortgage, if they have not yet done so.
“If considering fixing, it would be worth doing so quickly so that you lock your mortgage in ahead of any potential fixed rate rises.
“There are good fixed rate deals still available but the lowest fixed rates available today could become a thing of the past once the ECB increases its rate.”
However, explaining a positive possibility Grant continued: “The upcoming takeover of PTSB by Bawag could lead to more intensified competition in the market as Bawag might decide to challenge the other banks and this could lead to lower mortgage rates for borrowers.
“Borrowers need to have an open mind and to look beyond the mainstream lenders.
“There are 12 mortgage lenders in the Irish market today and failure to explore all offerings could see borrowers lose out on the opportunity to save considerable sums.”
Bonkers.ie’s Darragh Cassidy also offered a several lining and explained: “The flip side is that savings and deposit rates should also increase.
“Indeed, we’ve already seen the likes of PTSB, Bankinter and Raisin improve some of their rates for savers.”
