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Interest rates: Pain for homeowners and first-time buyers as rises push up mortgage payments

The decision by the European Central Bank (ECB) to raise its interest rates to the highest level since the launch of the euro will cause financial hardship to Irish homeowners and would-be homeowners and push more people into mortgage arrears, it has been warned.

The 10th consecutive rate rise since last summer will see the bank’s main lending rate climb from 4.25 per cent to 4.5 per cent and immediately add around €25 on to the monthly repayments of a typical tracker mortgage holder. It came with a warning from ECB president Christine Lagarde that that while rates may have reached a peak, there is no prospect of a reversal of its aggressive monetary policy aimed at bringing inflation across the eurozone under control.

“With today’s decision, we have made sufficient contributions, under the current assessment, to returning inflation to target in a timely manner,” Ms Lagarde told reporters. “The focus is probably going to move a bit more to the duration, but it is not to say – because we can’t say – that now that we are at peak.”

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• Pain of ten consecutive interest rate rises will be felt for a long time: The decision by the European Central Bank (ECB) to raise its interest rates to the highest level since the launch of the euro will cause financial hardship to Irish homeowners and would-be homeowners. The 10th consecutive rate rise since last summer will see the bank’s main lending rate climb to 4.5 per cent and add around €25 on to the monthly repayments of a typical tracker mortgage holder.
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