Mortgage rates tick up as ECB hike expected next month

"The European Central Bank (ECB) is expected to hike its lending rates by 0.25 of a percentage point next month. The average rate was 3.52pc for a new mortgage in this country in March, up from 3.51pc the previous month and from 3.50pc in January, according to the Central Bank. The higher rates come after two small, non-bank lenders increased their new fixed rates, with markets expecting a rate rise next month from the ECB."

"Lenders would be likely to pass on higher ECB rates to borrowers in the form of higher mortgage rates. In the past few weeks both ICS Mortgages and Nua Money increased their fixed rates for new customers. Average mortgage rates across the Eurozone were calculated at 3.4pc in March, similar to the previous month. Rates range from as low as 2.44pc in Bulgaria to as high as 4.12pc in Latvia, the Central Bank of Ireland said."

"Brokers said there are wide variations in mortgage rates on the market in this country. An analysis by Bonkers.ie shows that they range from 3.85pc to 4.99pc for a three-year fixed for a first-time buyer couple borrowing €300,000 with a 10pc deposit. Variable rates range from 3.85pc to 4.70pc, broker Bonkers.ie said."

"“Irish mortgage rates, at least with the main banks, have remained fairly steady over the past few months. But we could see the ECB hike rates in response to the ongoing conflict in the Middle East as soon as June, and this could lead to a hike in mortgage rates later in the year.” He said ICS Mortgages and Nua Money, two of the smaller lenders in the market, have both already increased their fixed rates for new customers."

The European Central Bank is expected to increase lending rates by 0.25 percentage points next month. The average rate for a new mortgage in Ireland rose to 3.52% in March, up from 3.51% in February and 3.50% in January. Higher rates follow increases by two non-bank lenders for new fixed-rate customers, while markets anticipate further ECB-driven changes. Lenders are likely to pass higher ECB rates to borrowers through higher mortgage rates. In Ireland, mortgage rates vary widely across lenders, with three-year fixed rates for a first-time buyer couple borrowing €300,000 with a 10% deposit ranging from 3.85% to 4.99%. Variable rates range from 3.85% to 4.70%. Across the Eurozone, average mortgage rates were 3.4% in March, ranging from 2.44% in Bulgaria to 4.12% in Latvia.

Read at Irish Independent