Mortgage rates are going up again after the European Central Bank announced an increase of 0.25%, bringing its key interest rate up to 4%.
Banks and building societies are expected to move quickly to pass the rate increase on to borrowers and savers.
This is the eighth increase in interest rates since December 2005 and it brings mortgage rates to their highest level for almost six years.
Today's increase was very clearly signaled when the European Central Bank met in Dublin last month.
On that occasion, European Central Bank president Jean-Claude Trichet (left) made it clear that the reason for the rate increase was to choke off rising inflationary pressures throughout the European economy.
The bank's doctrine is that low and stable inflation is essential for sustainable economic growth and job creation, and it is the ECB's job to control price pressures.
Nevertheless, the interest rate hike will present mortgage holders with another headache because their monthly mortgage repayments will rise.
The increase will amount to about €15 for every €100,000 borrowed over 25 years.
It means that in net terms first-time house buyers nationally will now have to fork out €300 more per month in mortgage repayments than first-time buyers 18 months ago.
For first-time buyers in Dublin the corresponding increase in net monthly repayment is €415.
Today's increase in interest rates coincides with news from Irish Bankers Federation that there has been a 19% fall in the number of mortgages lend out by financial institutions in the first quarter of this year, compared with the same period last year.
