Interest rates rose again yesterday – leaving most households with hundreds of euro extra in their mortgage payments.
It was the fifth hike since last summer as the European Central Bank battles to control inflation. It means hundreds of thousands of households are waking up to the bad news that the main pillar banks are passing on, or are preparing to pass on the increases.
However, there was hope last night cost of living supports would be extended beyond the end of this month after January’s tax receipts saw the Exchequer pull in €7.5billion. Finance Minister Michael McGrath said “the Irish economy is in good health” and “we have the resources to do so” when asked if such an extension was imminent.
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The ECB base rate is now 2.5%, an increase of 0.5%, with the promise of even more hikes on the way over the next few months. AIB announced the increases would apply to variable rates from next month while Bank of Ireland said they would be raising the cost of most tracker mortgages products from February 22.
Sinn Fein finance spokesman, Pearse Doherty said the Government must consider new mortgage interest supports for cash-strapped households. He added: “Borrowers will be paying thousands of euros more in interest this year in the midst of a cost of living crisis. Others are likely to see their interest rates increase in the coming period.
“It is now clear that timely, targeted and temporary mortgage interest relief must be introduced to support hard-pressed borrowers.” Meanwhile, Finance Minister Michael McGrath has given strongest Government indications yet that crucial cost of living cash supports would continue past the current deadline at the end of this month.
He was speaking to the Today with Claire Byrne Show on RTE Radio One yesterday morning. Mr McGrath said: “We are in a position where we can make interventions...We have the ability to step in and step out as appropriate, it is a judgment call.
“I’m very conscious in the months ahead we may have to make further interventions.” The minister in charge of the country’s finances explained that “in principle” the Government would “intervene when the need is most”.
He said: “My sense is a lot of people are under real pressure.”
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