Further crippling hikes on the way
Published 15/04/2010 | 05:00
MORE crippling mortgage rate rises are on the way for hard-pressed mortgage holders, the new Financial Regulator warned yesterday.
Matthew Elderfield was speaking as it emerged KBC Homeloans will announce today it is increasing its mortgage rates for new and existing customers.
The regulator told an Oireachtas committee higher mortgage rates were an "unfortunate but inevitable consequence" of the banking crisis.
He told the Oireachtas Joint Committee on Economic Regulatory Affairs Ireland had enjoyed low mortgage rates, but this era was coming to an end.
A string of lenders have already pushed up their standard variable rates for existing borrowers, and hiked fixed rates for those seeking to lock in.
Now the Irish Independent has learnt KBC Homeloans is to increase its standard variable rate for new and existing customers by 0.41pc to 3.65pc from May 1.
Fixed rates will rise with effect from next Monday.
The three-year rate for new customers is to rise from 0.21pc to 3.90pc. The three-year rate for existing customers is to rise by 0.26pc to 4.25pc from the same date.
The lender is introducing a new fixed rate of 4.95pc for new borrowers.
KBC, which has about 10pc of the mortgage market, is also introducing a new discount variable rate for new buyers.
This will be 0.55pc lower than the ordinary standard variable rate for the first two years of the mortgage term.
Meanwhile, Danish-owned National Irish Bank has defended its policy of refusing to allow its customers who are in negative equity to qualify for a fixed rate.
This is because the bank only offers fixed rates to those whose loan represents 80pc or less of the value of their home.
A spokesman for the bank said any customers who were having difficulty paying their mortgages should contact the bank and arrangements can be put in place to facilitate them.