Interest rates could be raised by the European Central Bank (ECB) in the coming months, leading to higher mortgage repayments for thousands of home owners and borrowers.
European Central Bank president Christine Lagarde indicated this week that the financial institution could raise its interest rates from historic lows as soon as July as inflation in the eurozone soars.
The ECB should end bond-buying "early in the third quarter", Lagarde said in a speech in Ljubljana, and could then raise interest rates "only a few weeks" later.
This is seen as the most clear sign yet from Lagarde that the ECB is ready to move on rates soon.
The US Federal Reserve and other major central banks that have already taken the step to combat inflation.
ECB policymakers will next meet on June 9 and July 21 to decide their course of action.
There has been no interest increase in over a decade and the move would lift rates from their current historically low levels.
Daragh Cassidy of Bonkers.ie said any increase in rates is likely to be small and gradual.
"Anyone on a fixed rate won’t see an immediate change to their repayments - however when they come to the end of their fixed-rate period they will be faced with higher roll-over rates," he said.
However, he said those on tracker mortgages or variable rates could see an almost instant increase in their monthly repayments.
"For someone with €200,00 remaining on their tracker mortgage over 20 years – currently paying a margin of 1% - they’re looking at an increase in repayments of around €45 a month if the ECB raises rates by 0.50%.
"If you’re an average first-time buyer borrowing €250,000 over 30 years at the average rate of 2.76% - a 0.50% increase would add around €70 a month to your repayments (if you’re on a variable rate).
"So these aren’t huge sums of money. However if rates were to eventually return to more normal levels - say 3% or so - that €250,000 mortgage would be over €400 more expensive each month!" Mr Cassidy said.
He added that the increased interest rates would hike up borrowing costs for car loans, home repairs or house retrofits.
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