What is the situation for borrowers? - Morning Ireland

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The successive rate rises by the European Central Bank have made borrowing far more expensive than has been the case over the last ten years. 

Daragh Cassidy, Head of Communications at, appeared on Morning Ireland to discuss the potential ramifications for mortgage owners. 

Listen to the interview above or look at the main points discussed below.

Main points from the interview:

  • This time last year, it was possible to get a mortgage with less than a 2% interest rate. Since successive rate hikes, the cheapest rate is now just under 4%. 
  • The European Central Bank (ECB) could increase rates further in September, increasing mortgage uncertainty. 
  • Tracker customers have felt the biggest impact of the increased cost of borrowing, but the next big concern is customers coming off their fixed rates in the near future. 
  • Customers on fixed rates may find themselves falling off their 2% rate, and then having to refix at rates over 4%, adding hundreds of euros to monthly repayments.
  • Despite rising mortgage rates, the returns for savers have stayed relatively low. The best savings rates on the market pay around 2%, when it is possible to get savings accounts paying over 3.5% elsewhere in Europe. This is potentially due to the main banks subsidising mortgage rates.
  • This creates a dilemma, whereby in order to give savers fair returns, mortgage rates may need to increase further.
  • If you are looking for better returns on savings, it may be worth looking at platforms such as Raisin, which allows Irish consumers to access European savings accounts, which generally offer higher rates.

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