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ICS Mortgages announces another interest rate hike

ICS Mortgages announces another interest rate hike

It has been reported that ICS Mortgages will increase their fixed rates for new owner-occupier mortgages by 0.5 percent from next month. ICS Mortgages is a nonbank lender that currently commands about 5 percent of the Irish mortgage market. This increase would be applied to all loan-to-value bands but would not apply to the existing customers on the fixed-rate contracts. This will be the third time they have raised their fixed rates this year. ICS, owned by Dilosk, had earlier increased its rates in March and May. Their variable rates which had been increased by 1.25 percent recently, would remain unchanged.

As per the statement released by the company, the increase in the fixed rate also reflects the ongoing upward pressure on the cost of financing fixed-rate products and the evolving interest rate environment. This move is expected to be followed by other mortgage providers, which would heap further financial pressure on Irish households when energy and food costs surge. As of now, most of the leading lenders in Ireland have not changed their variable rates in response to the European Central Bank’s rate hikes. But that is expected to change in the coming weeks, especially when the ECB plans another rate increase in October.

The first-time buyers with a 10 percent deposit who want to avail of ICS’s five-year fixed rate would now pay a rate of 4.19 percent as compared to 3.69 percent previously and just 2.5 percent back in March. In short, it means that a first-time buyer borrowing 250,000 pounds over 30 years will now have to pay around 1210 pounds a month compared to 1140 pounds a month previously. The movers or those with a 20 percent deposit now have to pay 1197 pounds a month compared to 1128 pounds a month earlier. All eyes would now be on the leading retail banks: AIB, BOI, and PTSB, to see when they would increase their rate. They have absorbed the ECB’s 1.25 percent rate hike for their non-tracker customers.

Featured Image Credit: RTE

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