BANKS are set to charge more for current accounts, continue to cut deposit rates and hike credit card charges, experts have predicted.
And this year banks could offer a financial incentive to tracker mortgage holders to switch to a variable rate, financial analysts said.
The European Central Bank (ECB) meets next week, with expectations it may deliver a cut in interest rates some time in the first three months of this year. But any cut will only benefit those on trackers, with homeowners with variable rate mortgages likely to see further hikes, experts said.
AIB have hiked variable rates by 0.5pc each in two successive months, while Bank of Ireland pushed up its variable rates by 0.5pc last year.
Trevor Grant of the Association of Expert Mortgage Advisers said banks were likely to try and get more people to give up trackers by enticing them on to variables.
Trackers are loss-making for banks, but great value for consumers, because they are tied to the ECB rate and are priced at a low margin over the ECB rate.
A typical tracker is 1pc above the ECB rate, meaning a mortgage rate of 1.75pc. This compares with an average variable rate of 4.3pc.
Some 300,000 homeowners now have variables, up from 200,000 just a few years ago. The number with trackers has fallen to 373,000.
People would be offered a discounted variable if they gave up their trackers, Mr Grant said. This may suit people considering moving, who were due to lose their tracker anyway.
Mr Grant said the Central Bank would have to approve any bank moves to get people to part with valuable trackers.
Two years ago Permanent TSB topped up overpayments on a tracker mortgage by 10pc, but there was a poor take-up of the offer.
Banks are desperate to get back to making profits and they have targeted higher charges for consumers along with lower interest on deposits, financial adviser Karl Deeter said.
He said the interest charged by banks will continue to rise, while there will be an increase in the cost of overdrafts and term loans. Bank of Ireland pushed up the interest it charges on credit cards days before Christmas. Some cards saw rates rise by up to 4pc.
Ulster Bank is the only bank offering a fully fee-free current account, but it is due to put restrictions on this in the summer.