Mortgage holders are moving "in their droves" to fixed rates, as the looming threat of interest rate hikes draws ever closer, according to the Association of Irish Mortgage Advisors.

Trevor Grant, chairman of the association, said fixed rates accounted for 84% of new agreements in the last month of 2021.

He said for those on relatively high margins, fixed rates which offer security of payment could be an attractive option.

With the European Central Bank hinting that it could hike rates as soon as this year, Mr Grant said many people are choosing to move away from variable rates.

"Mortgage holders should not hang their hat on comments coming from economists or the European Central Bank regarding the timing of any increases.

"The reality is that at this time, nobody knows," he said.

Mr Grant said the general consensus is that any increases are likely to be small, around 0.25% and incremental.

Speaking on RTE's Morning Ireland programme, Mr Grant said mortgage holders should be asking themselves how they might deal with any future increases.

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For those with a mortgage or looking to get one, news that Ireland has the highest rates in the euro zone will come as no surprise.

Figures from the Central Bank yesterday revealed that the average new Irish mortgage rate was 2.69% in December, compared to an average of 1.29% across the rest of the countries that use the euro.

Despite this news, mortgage rates in Ireland have been slowly declining and are now at a record low.

"Interest rates are now as low as they are likely to be for some time," Mr Grant said.

He said he believes competition in the Irish market has never been so high.

"As the data suggests, more and more mortgage customers are looking around for better deals.

"Their own lender is not obliged to tell them that better terms are available elsewhere," but he said a broker will do that.

"This is leading to many existing mortgage customers savings thousands of euros in future mortgage payments," he said.