450,000 homeowners facing higher mortgage rates as early as July.

The European Central Bank could raise interest rates as soon as July but certainly no later than September, nine sources familiar with ECB thinking told news agency Reuters. A 0.25 percentage points rise in the ECB rate could add €380 a year to the cost of a typical €250,000 variable rate mortgage.

If there are two rate rises it could end up costing a typical household on a variable rate €760 over a year. An ECB rate rise will make variable and tracker mortgages more expensive. It will also mean dearer new fixed rates.

About 200,000 homeowners are on standard variable rates and are set to pay more with rates. Around 250,000 are on trackers, which rise or fall when the ECB rate changes. Some 60pc of homeowners are still on a combination of variable and tracker rates, the Central Bank said last October. A 1 percentage point rise in the European Central Bank rate would cost them €140 a month, it said at the time.

ECB policymakers are under pressure to act due to a surge in inflation across the Eurozone. Its Governing Council members have long criticised the ECB for underestimating inflation, which hit 7.5pc across the zone last month.

ECB President Christine Lagarde said last week that bond buys to stimulate the Eurozone economy should end early in the third quarter and a rate rise this year is likely. Nearly all of the sources said that they see at least two rate hikes this year, but some argued that a third is also possible, although highly dependent on how markets digest its moves.

There has been a large take-up of fixed-rate mortgages in this country which are more competitively priced than variable rates. But a rise in the key ECB rate would make future fixed rates more expensive. Tracker rates rise automatically when the ECB rate rises, with variable generally moving up when rates rise in the Eurozone.

In the last few weeks mortgage rates have been cut by Permanent TSB, Bank of Ireland and EBS. However, ICS Mortgages increased its rates towards the end of February.

Mortgage experts said Irish mortgage rates are now probably close to the lowest level they will ever be, and have encouraged those on variables to lock in to fixed rates. Joey Sheahan of online brokers MyMortgages.ie and author of ‘The Mortgage Coach’ warned that there could be a number of interest rate rises on the way.

“With a first ECB interest rate rise now seeming inevitable over the next few months, we might well see a total of two or three rises in the next 12 months.

He said this could mean rates rising by 0.75 percentage points for most Irish mortgage holders.

Mr Sheahan said those not on a tracker should lock in to fixed rates.

Mark Coan of broker MoneySherpa said the markets have priced a rate increases of 1 percentage points or so in the next 18 months.

“An ECB rate hike means higher borrowing costs for banks and potentially higher mortgage rates for borrowers. As fixed rates are currently at record lows, we are advising our customers to fix now to avoid increased repayments.”

Mr Coan said that to get the best long-term fixed rate you usually need to switch lenders, which takes at least two months to complete so people need to act now.

Meanwhile, research carried out by Bonkers.ie in conjunction with Red C has revealed that 89pc of consumers are concerned about rising prices. Inflation in Ireland is currently 6.7pc, meaning prices are rising at their fastest pace in 22 years. It is expected to breach 8pc over the coming months.

The research showed 89pc of people say they are highly concerned or worried about rising gas and electricity prices. And 81pc of people are highly concerned about rising petrol and diesel prices. Food prices are also of big concern.