Mortgage customers face a huge monthly hike in repayments with Finance Ireland after the lender announced a staggering round of rate increases.
They are the latest lender to up its mortgage rates in response to recent ECB hikes with further ECB rate increases likely to result in Ireland's main lenders following suite with hikes on holders.
Customers are already struggling with rising energy and fuel bills while food inflation is running at 10%. This latest rates increase will hit some families hard and may rule out some new customers waiting to draw down their mortgages.
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The ECB hiked rates by 1.25% over the past few months and so far the likes of Bank of Ireland and Permanent TSB have not passed on the pain to customers but Finance Ireland has followed Avant Money and ICS Mortgages in applying the increases to peoples' bills.
"Finance Ireland’s three and five-year fixed rates will increase by a whopping 2% for new customers. This means first-time buyers with a 10% deposit will now pay a rate of 5.95% if they choose the lender’s five-year rate," Darragh Cassidy from Bonkers.ie explained.
"Its variable rate for new and existing customers will also increase by 2% to between 4.75% and 5.15% depending on the size of your deposit.
"These increases will add around €300 a month to the average mortgage payment and are well in excess of the 1.25% hike which the ECB has announced.," Darragh explained.
"Finance Ireland's longer-term fixed rates over 10 to 25 years will only increase by between 1.49% to 1.58% depending on the term and the size of the deposit a mortgage seeker has. But these might still be worth a look given the increasing uncertainty over mortgage rates over the medium to long term. Indeed, all Finance Ireland's longer-term fixed rates are now cheaper than its three and five-year rates."
The rate hikes will take effect immediately for new customers while those in the process of taking out a mortgage with Finance Ireland can avail of the old lower rates if they draw down their mortgage before Friday, October 14.
This still will have a major impact on those in the process of buying their home with the lender with an effective stopwatch now on completing their application.
"Some switchers who may have spent weeks gathering documentation and submitting their switch application may suddenly find it's no longer profitable to move lender if they aren't able to avail of the old rates," Darragh said.
Looking forward, all eyes are on AIB, Bank of Ireland and Permanent TSB who so far haven’t passed on any of the ECB rate hikes.
Bonkers.ie has some advice for first-time buyers, those moving home or switching mortgage providers:
"If you're a first-time buyer, moving home, or looking to switch your mortgage to save some money, remember that you can compare mortgage interest rates and incentives across all lenders in Ireland in just seconds with our mortgage calculator.
"Better still, when you find the right mortgage for you, you’ll be able to complete your mortgage journey with us through our mortgage broker service.
"Our mortgage broker service is fully digital and paper-free meaning you can do it all online from the comfort of your home."
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