FINANCE Ireland is the latest lender to raise mortgage rates in response to two increases by the European Central Bank.
Floating rates and new fixed rates from non-bank lenders are increasing with immediate effect.
It will increase the variable and fixed rates of its mortgage products by 1.5 to 2 percentage points.
Those are big increases, mortgage experts said.
The magnitude of the increases depends on the loan to value and/or fixed rate duration.
The new rates will be effective immediately for new business.
Mortgage applications that have been approved and are drawn before the close of business on Friday this week will continue to benefit from the existing rates.
This means the lender has given very little notice to money changers and new buyers in the process of getting a new mortgage if rates go up.
After the rate increase, a 20-year fixed-rate mortgage will drop from 4.6% to 5%, depending on the loan-to-value percentage range.
This is the second time this year that Finance Ireland has raised rates.
In July, Finance Ireland completed a €50 million capital raise with the support of two global investment managers and last week the company published its accounts which reported pre-tax profits for 2021) of 28 million euros, compared to 9.7 million euros for 2020.
The accounts also showed that in 2021 the company saw record new loans of over €1bn, an increase of 54pcon 2020.
A Finance Ireland spokesperson said earlier: ‘Over 80% of our loan applications over the past year have been for fixed terms of 10 years or more as clients seek to retain certainty in a period of widely anticipated interest rate hikes.
“Overall, we have funded strong mortgage volumes throughout this year, but these interest rate increases we are implementing are the direct result of significant increases in funding costs over the past few years. last months.”
The move comes after the European Central Bank raised rates twice this summer, taking its benchmark rate to 1.25%.
And he threatened further rate hikes.
Last week it emerged that And ICS Mortgages would raise all of its new fixed rates by 0.5% in all loan-to-value tranches from the start of next month.
Its five-year fixed rate for those with a 90% loan-to-value ratio will be 4.19%.
This follows an earlier announcement that Dilosk-owned ICS would raise its variable rates by 1.25 percentage points from October 1 for residential customers.
In August, ICS Mortgages announced that it was capping the amount of new home loans for the first time at just two and a half times income.