Last week the European Central Bank (ECB) president Christine Lagarde refused to rule out an ECB rate rise…
Mortgage holders have been warned that rates have hit rock bottom and the next moves will be increases. It come as AIB’s broker-focused subsidiary Haven has cut two of its fixed rates.
This follows recent reductions from non-bank lenders Avant Money, ICS Mortgages, Finance Ireland and EBS. The Haven decreases come at a time when experts said mortgage rates were at their lowest and the next moves are set to be increases.
Some 200,000 homeowners are on standard variable rates and are set to pay more with rates across Europe expected to rise in the coming months. Around 250,000 are on trackers, which rise or fall when the ECB rate changes.
An increase of about 25 basis points (one quarter percent) is expected. This means that monthly repayments would increase by about €40 on a €300,000 mortgage, said financial adviser Frank Conway. Last week the European Central Bank (ECB) president Christine Lagarde refused to rule out an ECB rate rise – a move that would see tracker and variable rates rise, and new fixed rates become more expensive.
This week the Dutch Central Bank president and a member of the ECB’s governing council, Klaas Knot, said he expects the ECB to raise interest rates in the fourth quarter of this year. He expects an interest rate rise of 0.25pc between October and year’s end.
Head of mortgages at fast-growing Avant Money, Brian Lande, said it looks like we are at the bottom of the mortgage rates cycle.
“We look to be at the bottom of the market, so now is the time to lock into a longer-term fixed rate. With rising inflation, the funding markets are pricing in a future ECB rate increase and we have seen market funding costs rise by an average of 20 basis points since December.”
Avant Money, which offers rates fixed for the life of a mortgage, said wholesale money markets had already seen funding costs rise by 20 basis points across the board since December, an indication of mortgage rates rising.
Mr Lande said that in five years’ time we are likely to look back at current fixed rates as being the “deal of century”.
And the head of Irish mortgage provider ICS has said home loan interest rate rises this year cannot be ruled out, given the inflationary backdrop that exists. Haven is cutting the interest rate on its new Green four-year fixed rate by 0.15 percentage points to 2pc. It said this would mean it will have the most competitive green mortgage rate in the market.
The rate is available to eligible customers whose homes have a BER rating of B3 or higher regardless of their loan-to-value (LTV) ratio. It is also cutting its standard three-year fixed rate mortgage by 0.20 percentage points to 2.35pc. The announcement follows the reduction of Haven’s seven and 10-year fixed mortgage rates three months ago.
Whether you are a first time buyer, moving home, looking to switch lender , should you have any concerns about the issues raised in this article, or investing in a buy-to-let property, why not chat to a Seaspray Mortgage adviser today about finding the mortgage that’s right for you:
Seaspray Financial Services Ltd trading as Seaspray Private and Seaspray Mortgages is regulated by the Central Bank of Ireland with registered number C165527
This content is taken from a previous article published by independent.ie on 08-02-22,written by