Homeowners here could be set to see their mortgages rise sharply in the coming months.
It comes after the Bank of England warned that the current Euro Zone crisis is driving up the cost of borrowing for lenders and that they would look to restore their profit margins by passing on that cost.
While the bank’s warning is largely aimed at the British market, the fact that a number of banks here are British owned could mean there is a knock on effect for Irish mortgage holders.
It is telling also that Bank of Ireland is one of the main banks increasing its rates in Britain, with a rate increase of 1.5% set to come into force between June 1st and September. The move, which has replicated on a smaller scale by five other UK banks in the past few weeks is estimated to affect 100,000 borrowers.
Ireland has already seen its lending rate on the open market jump to over 7% because of the crisis in Greece.
Any increase in rates here would affect those on standard variable rate mortgages.
