1pc hike would add €120 a month to typical loan
Published 18/12/2010 | 05:00
Every quarter of a per cent increase on the interest rate ends up increasing monthly repayments by €15 per €100,000.
It means that if the ECB increases interest rates by 1pc homeowners would have to find an extra €120 per month for a typical €200,000 mortgage.
Around 75pc of all mortgages would be affected immediately by an interest rate rise because of the unusually high number of variable mortgages, including trackers, in the Irish market. Even the other 25pc of fixed rate deals are typically only fixed for relatively short periods, often as little as two years compared to 20-year deals typical elsewhere.
The IMF said data from the Irish Central Bank indicates that about 70,000 residential mortgages are already in some kind of distress. It said the number in arrears had risen steadily, fuelled by high unemployment and growing economic stress on households.