Irish Interest Rates, is there a more thorny topic in Ireland in 2011?
It looks like the ECB will increase it base rate in April as inflation continues to be a problem. With interest rates on the rise this will have a negative effect on the Irish economy and the property sector as it will affect mortgage rates.
An increase in the ECB base rate will affect all mortgage holders including tracker mortgages, which have not been affected so far when Irish Banks increased their mortgage rates. This will be the first rate increase for tracker mortgages since the ECB brought the base rate down to 1 percent two years ago to try and stimulate the EU economy.
Irish people already struggling with their payments due to reduced incomes caused by the Government levy and reduced wages in the public and private sectors will find this increase difficult to bear.
This will put more pressure on people who are in arrears with their mortgage payments.
It is hard to see any light at the end of the tunnel for the people who bought property at the height of the boom and now are struggling to meet their payments.
When the ECB increases the rates, there is no doubt but the Banks will pass on the increase to their customers.
Some may even take the opportunity to increase their mortgage rates by a higher margin than the ECB rate increase.
What do you make of it all?
