Bank of Ireland has raised the interest rate on its fixed rate mortgages ahead of the ECB's widely expected rate rise next month..
Demand for fixed-rate mortgages has risen as homeowners try to lock in low fixed rates ahead of the next monetary tightening.
The rate on a three-year fixed mortgage will rise by 0.6 per cent to 4.09 per cent, while the one-year rate for new customers will rise by 0.34 per cent to 3.09 per cent and by 0.6 per cent to 3.89 per cent for existing customers.
Bank of Ireland chief economist Dr Dam McLaughlin has forecast rate increases of between 1 and 1.5 percentage points over the next 15 months as the economic recovery in the euro zone takes hold.
If these forecasts are correct, the average repayment on a €200,000 variable mortgage over 20 years will rise by €164 per month to €1,328.
According to Olive Moran of Bank of Ireland Mortgages now is a good time to avail of fixed rates for holders of large mortgages who want more certainty in their financial planning.
The rate increases are effective from the close of business today.