The European Central Bank is widely expected to announce an increase in interest rates this afternoon.<\/p>\n
The current rate of 2% is likely to rise to 2.25% as the bank battles rising inflation as a result of higher energy costs due to the Middle East conflict.<\/p>\n
It will be the first increase since 2023, following the energy price shock caused by Russia’s invasion of Ukraine a year earlier.<\/p>\n
The ECB\u2019s decision will quickly result in higher repayments for Ireland\u2019s 110,000 tracker mortgage customers.<\/p>\n
It also means a shift in the wider interest rate environment, putting upward pressure on other home loans and borrowing costs generally.<\/p>\n
A 0.25% increase on a \u20ac300,000 mortgage over 25 years would add \u20ac37 per month to repayments.<\/p>\n
Many people shopping for mortgages now look at fixed rates offered by Irish banks as they offer better value than variable loans.<\/p>\n
Generally rising interest rates mean that new fixed term loans will increase over time.<\/p>\n
That will affect new customers and those who have come to the end of an existing fixed loan and wish to take out another.<\/p>\n
Observers believe that today\u2019s expected rise is likely to be followed by at least one further increase this year, possibly in September.<\/p>\n
The ECB has a target of keeping inflation at 2%, however, the increase in the cost of living is running at 3.2% among the 21 countries which use the euro. In Ireland it was estimated to be 3.5% in May.<\/p>\n
But the move by the ECB will benefit savers \u2013 provided banks pass on the rate increase.<\/p>\n
Financial institutions frequently do not increase returns for all saving products when central banks put up rates.<\/p>\n
Savers are advised to bear this in mind and use it as an incentive to shop around for the best deal available.<\/p>\n","protected":false},"excerpt":{"rendered":"The European Central Bank is widely expected to announce an increase in interest rates this afternoon. The current…\n","protected":false},"author":2,"featured_media":493350,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-493349","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/493349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=493349"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/493349\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/493350"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=493349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=493349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=493349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}