How rising interest rates will impact mortgages - Newstalk
The European Central Bank (ECB) has announced another interest rate increase - the third this year - that will impact mortgage holders in Ireland.
Daragh Cassidy, Head of Communications at bonkers.ie, appeared on Newstalk to discuss the interest rate hike and outline what options people on a variable or tracker rate have.
Take a look at the key points discussed in the interview below, or listen back to the interview above.
- Before the hike, interest rates stood at 1.25%. At the start of the year, they were at 0%.
- The ECB is increasing rates to 2%, which will impact both tracker customers and variable rate customers here in Ireland.
- This is an increase of 0.75%.
- While historically, this increase isn’t too steep, it’s coming at a very bad time when we’re in the midst of a cost of living crisis.
- To put that into perspective, if interest rates go up to 2% and you’re paying a 1% margin on your tracker, you’d be paying an extra €170 or €180 per month on your mortgage repayments if you had €200,000 remaining on your mortgage.
- It’s likely rates will increase again when the ECB meets in December.
What should people do?
- If you’re on a tracker and you’re paying a margin of 1% or less, you’re probably better off sticking with the tracker. You should get advice from a broker or financial adviser.
- If your margin is higher, you may be better off locking into a fixed rate while they’re still available.
- If you do look to switch mortgages, you could be waiting several weeks.
- Sometimes you don’t even need to switch lenders to get a better rate. You can contact your current lender and ask what rates are available.
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