Mortgage repayments are set to rise after the European Central Bank raised interest rates by 0.25 per cent. Mortgage lenders are expected to pass on the increase in the coming days. The move was prompted by the poor performance of the Euro, and news of the increase has bolstered the currency on international markets.
The poor performance of the Euro, particularly over the last fortnight prompted the European Central Bank to take some measure which would stabilise the currency. The hike of 0.25 per cent is not as high as some economists forecasted, but even this morning most commentators believed that no rate increase would emerge from the ECB meeting.
Mortgage lenders are expected to pass on the 0.25 per cent to customers. On a mortgage of £70,000 the new rate would mean an extra £14 per month in repayments. On a mortgage of £100,000 it would mean an extra £20 per month. And on a £150,000 mortgage the increase would be £31 per month.
This hike follows similar increases in the US and Britain in recent days. But Eurozone interest rates, including Ireland are still quite low. In the United States the base rate is 5.75 per cent. In Britain it is also at 5.75 per cent. After today's increase, in the Eurozone our base rates are 3.25 per cent.
